Buy to Let Finance

The Buy to Let Market has changed a lot in recent times. Taxation rules have changed significantly meaning that stamp duty costs have increased for investors and if you are in need of mortgage finance then some of the capability to offset mortgage interest as a personal business expense is being phased out. This in turn has led to lenders being obliged to curtail affordability on buy to let mortgages to reflect these tax changes and other affordability considerations. This is particularly the case for higher rate tax payers.

mews

Our Service

 
In reality the market has just become a little more complicated and we can help by providing.

  • Expert advice from advisers who really understand this marketplace
  • Loans from £100k – 100m
  • Rates from about 2.5%
  • LTVs up to 85% or 75% for limited companies
  • Portfolio planning and large loans a speciality
  • Whole of market advice
  • No minimum income required by some lenders
  • Efficient 100% financing of deals using existing properties
  • Finance available to individuals,  limited companies, partnerships, offshore vehicles and trusts.

Understanding the market for limited companies

People borrow in limited companies and other structures for many reasons including:

  • Legal ring fencing
  • Tax efficiency
  • Retirement planning
  • Family succession
  • Joint ventures
  • In conjunction with a development business
  • Because they are a trading business with surplus profits

While there are still less available lenders for limited companies than there are for personal individuals, there are  many options available. Rates and criteria vary. Only some offer interest only. Some can deal with layered companies. A few can consider overseas applicants. Nearly all require some form of personal guarantee.

To help you find the optimum solution please complete our contact form or talk to an expert adviser.

 

Case Studies – Buy to Let Finance

Loan amount: £1.6m
Rates achieved: 2.95-4.49%
Location: Edinburgh, UK

Mr and Mrs M had a limited company buy to let portfolio with RBS. The facility had come to the end of its term. RBS were looking to offload and the portfolio was in Scotland. The client was on a reasonably high LTV and enjoying decent rates but knew they would have to pay more. In the end no limited company solution existed and we had to raise funds in their personal names using nine properties as overall security. Tax considerations were important and as the client said “..There was a huge amount of work involved and specialist knowledge required to work within a quite baffling system at times. It would not have been possible to achieve this without your help.”

Loan amount: £150k
Rates achieved: 3.75%
Location: London, UK

Mr H is an IT consultant who wished to build a property portfolio with his profits. If he took the money out of his limited company he would pay higher rate tax but very few lenders would support a loan to a company that was not a special purpose vehicle. We found one that was happy to lend the required amount of £150k to his limited company at a rate of 3.75%.

Loan amount: £1.3m
Rates achieved: 3.59%
Location: London, UK

“When I inherited a 40% share in my father’s property portfolio I was keen to buy out the remaining equity. I went to a few High Street banks to sew the deal up and was amazed to find that they just couldn’t deliver. What seemed to me to be a business no-brainer turned out to be a minefield of strange mortgage criteria.

I was recommended to Danny O’Sullivan at Stirling Partners Finance Limited by a friend who he’d done many loans for and was relieved to find that at last here was somebody who really knew what they were talking about.

We explored Limited Company borrowing versus Personal borrowing going through all the issues with my accountant and planning years ahead. We took into account the future development value of the site and made sure the leases did not impact negatively on this. We went through all the issues of switching from freehold to leasehold and dealt with all the lender issues concerning these. Finally, we got an excellent solution on an interest only basis, using three different lenders.

During this time Danny helped me deal with the stress of the whole process and regularly presented me with comprehensive spread sheets so that I knew to a penny what was happening.” Ms C

Loan amount: £600k
Rates achieved: 4.95% above LIBOR
Location: South coast, UK

Mrs B needed to exit development finance and was forced to take expensive private bridging which she asked us to replace. We had to help her choose between a limited company and personal buy to let exit and this required liaising with her accountant regarding taxation. The case was extremely tight on valuation and required extensive discussions with lender to achieve an offer. Similar challenges existed with legals as new developments often have many loose ends and more so when other lenders are involved. Tight deals require a lot of resourcefulness from the client and a lot of support from us and the lender

Loan amount: £1.2m
Rates achieved: 5% fixed
Location: London, UK

Mr D needed to refinance his property portfolio to exit an old bank deal. Parts of the portfolio were owned by different limited companies which in turn were owned by other limited companies. This was a problem for most lenders as they were nervous that the trading activity of one company might negatively impact on another. The client had to be careful to avoid taxation if he moved the ownership of any property. We found a lender who could lend the £1.2 m on a long term fixed at 5% with limited PGs

 

Apply Now for a decision in principle within hours

Complete our concise buy to let application form to find out exactly what terms are available and with your approval get your case agreed in principle subject to valuation within a matter of hours.

Apply Now

 

Leave a Comment