Ltd Company Buy to Let Mortgages
Following tax changes for those owning mortgaged buy to let properties personally, limited company mortgages have become more popular almost overnight.
There is a gradual tapering down of mortgage interest relief for personally held buy to let mortgages which started in April 2017, the full impact hits in 2020 when tax relief will be limited to basic rate tax only for mortgage interest payments on buy to let properties.
Of course taking specialist tax advice is always necessary, but this is a route that many are taking when buying investment property nowadays, given the changes.
The company itself can be brand new and have little or no track record or trading history, infact lenders much prefer this to a trading business as your assets are ringfenced away from the risk associated with a trading company. To access all the options, you’ll need an SPV limited company (Special Purpose Vehicle) with the correct SIC code or (Standard industrial classification of economic activities. It sounds more complicated than it is, the process to set up is actually very simple and low cost. Ask your accountant.
We can finance property held in trading businesses, holding companies, and SPV’s, all with varying ownership structures including UK companies owned offshore.
Lenders will still underwrite the lend based on the strength of the directors of the company and will usually require personal guarantees – there are a number of intermediary only lenders in this space with players competing rate wise more than ever before and there are a steady number of new entrants to the Limited side of the market, which of course is good news. Rates are the lowest they have ever been in this market and products are consistently growing in number.
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Finding the right deals and guidance
Working your way through the minefield of options can be done simply and quickly by contacting us. Every expense counts in property investment and so that’s probably why you’re looking to structure the right vehicle to own the property. Make sure you take plenty of advice from your accountant and also chat to a reputable buy to let mortgage broker like ourselves, who has all the right limited company mortgage deals available.
Limited company mortgage* deals are generally more expensive than personal buy to let deals, but we have already seen the gap close somewhat with lenders competing more and more. We’re also confident of seeing further entrants to the market and we’re looking to the bigger players to lead the way. Having said that, the tax benefits will generally more than outweigh the cost differential, we’d urge you to take specialist advice tailored to your circumstances.
The benefit of using ourselves lies in our knowledge of the whole of the market, that’s what sets us apart, especially where you’re looking for less commonly available mortgages. Limited company buy to lets do fall into that specialist category despite the fact they are commonplace within our business. We’ll do our very best to make the process easy for you. We know which lenders do what and how and we ensure the lender and scheme we recommend can ultimately give you the best funding, it’s all about using the tools at our disposal to best benefit you. We’ll crunch the numbers carefully for you and recommend deals purely on their competitiveness and suitability to you.
So with us we don’t just quote you an ‘approximate’ you’ll get the full, accurate, specific detail.
Whether you’re long in the tooth where investing is concerned, or you’re new to the property game, call us, we’ll do our level best to help you.
