Buy to Let Lending Portfolio Borrowing
If you are looking to create or expand on your buy to let portfolio then our highly experienced mortgage managers are here to help provide professional advice and expertly guide you through the process.
We can also help to review your current mortgages to ascertain if there are better options available that are more suited to your needs. Alternatively, if you want to know how the changing regulation will impact on your borrowing position, then we can talk you through the process.
What are the New Buy to Let mortgage regulations?
Prudential Regulatory Authority (PRA) mortgage underwriting changes
As of the end of September 2017, the new PRA mortgage underwriting changes came into force. In the past, you would be considered a portfolio landlord if you were a full-time landlord, had multiple Buy to Let properties, leased student accommodation or House of Multiple Occupation (HMO) properties. However, with the new PRA changes now in force, lenders must treat you as a portfolio landlord if you have four or more mortgaged properties.
This is an important market change, of which all Buy to Let investors should be aware, as it affects the stress testing of the mortgage and, as a consequence, how much you can borrow.
Going forward landlords with 4 or more mortgaged properties looking to take out an additional mortgage or remortgage will have to provide additional information to lenders. This will include information about your existing Buy to Let properties, your landlord experience, use of letting agents and future portfolio plans. Before a mortgage application can be submitted, you must cover all of these points.
What are the ‘Buy to Let’ tax bill changes and how will they affect me?
Both the extra 3% stamp duty on second homes along with the cuts to mortgage interest tax relief on Buy to Let properties (phased in from April 2017) have had a considerable impact on the UK Buy to Let market.
Higher rate taxpayers are no longer allowed to offset their mortgage interest against rental income before calculating the tax due. This means that investors will now receive higher tax bills even if they have not seen their income increase.
By 2021, all landlords will have to pay tax on all gross rental income received, less allowable expenses. This change means that, effectively, landlords will be taxed on their turnover and not their profit.
It is important to note that the impacts of the changes will affect those purchasing or remortgaging property through a Limited company differently, as opposed to in a personal name.
What are Buy to Let Portfolio Mortgages?
Recently more Buy to Let products are becoming available to the benefit of individuals, partnerships and limited companies. This includes those looking for mortgages on a new property or for those seeking to refinance existing properties within their portfolio.
These products can be used for several types of properties including;
- Single let residential houses and flats
- Properties that include a mix of residential and commercial elements
- Blocks of flats
- Houses in multiple occupation (licensed HMOs)
- Multiple apartments on a freehold title
- Student accommodation
- Flats above commercial premises
- Prime low-yielding properties
If required, we may be able to arrange a bespoke mortgage solution for you through our private bank. We have strong working relationships with a range of private banks and niche lenders who will consider each client on an individual basis.
What are my options when it comes to lenders?
As well as the increasing number of Buy to Let mortgage products becoming available, we have also seen a growing number of banks adapting their range of products on offer to meet the changing needs of borrowers.
Traditionally, Buy to Let has been a form of borrowing that was primarily available from private Banks. However, as a result of the changes in the Buy to Let market, we are now finding that some banks are increasing their flexibility of their mortgage products by lifting upper lending limits or increasing the maximum amount of properties they will mortgage.
We will be happy to help you navigate the challenging domain of Buy to Let mortgages and assist you in making the most of your portfolio.
How can we help you?
Our experts are happy to assist you in any way we can to ensure you are making the most of your portfolio. Our buy to let lending management services are suitable for the following: –
- Experienced Buy to Let investors interested in growing their portfolio
- Investors looking to remortgage one or more existing properties
- Those wanting to find out more about the products mentioned above
Our dedicated team of specialist mortgage managers can help you source the most suitable Buy to Let portfolio mortgage for your needs via our extensive network of banks and private lenders.
We can talk you through the complexities of new regulations and how they affect your business with expert advice on what to do moving forward. Our specialists can also discuss the range of products that may be available to you and help to find the best deal suited to your circumstances.
Here at Large Mortgage Loans our mortgage managers work to ensure our clients successfully navigate the complex world of buy to let mortgages as a portfolio landlord. Contact us today to find out more.
