New BTL 5 year fix from Foundation Homeloans

Foundation Homeloans announce a new exclusive 5 year fix at 3.34% fixed until 31/07/2023. Available up to 65% loan to value, to professional landlords in individual or company names. Rent stressed at 125% cover at pay rate for limited companies, or 145% for individuals. No minimum income requirement.

New BTL Remortgage Products from Paragon

Paragon Mortgages announce limited edition BTL remortgage products with free valuation and cashback, for portfolio landlords, i.e. having 4 or more properties.

2 year fixes at 3.4% for single properties or 3.74% for HMOs and Multi Unit blocks come with free valuation, £250 cashback and Nil arrangement fee.

5 year fixes at 3.6% and 3.84% respectively have free valuation, £500 cashback and 0.5% arrangement fee.

All Paragon applications have £150 application fee.

The Mortgage Works reintroduces 80% ltv for Buy to Let

From today, Thursday 22 March, The Mortgage Works are reintroducing new 2 and 5 year fixed rate products at 80% LTV, with rates starting from 2.99%. (Previous maximum ltv 75%)

The new range of 80% LTV products for Buy to Let and Let to Buy includes: 

·        Purchase, remortgage and further advance

·        A choice of fee options

·        Free standard valuation and £250 cashback options

They’re also increasing the maximum LTV for Houses in Multiple Occupation to 75%, (previously 65%) with rates now starting from 2.84%. 

Shared Accommodation properties

Shared Accommodation properties


Problems raising a Buy to Let mortgage on a property used as shared accommodation, but falling short of needing to be licenced as an HMO can be:

  • Lender will only allow rent to be assessed as a single family let – not as shared accommodation
  • Lender won’t accept separate tenancies
  • Locks on the doors not acceptable


All the above can be overcome by applying to the right lender. At ibmco our many years of experience dealing with Buy to Let mortgages have taught us which lenders are best for which properties. Please contact us.

EPC regulations for let property

The creep of regulation continues…..this time affecting the EPC rating of let properties.


From 1 April 2018, it will be against the law for landlords to grant a new tenancy in England and Wales to either new or existing tenants if the property doesn’t have an Energy Performance Certificate rating from A to E.  There are circumstances in which it is possible to apply for an exemption.


This is likely to be reflected in Buy to Let lenders turning down applications if it turns out the property’s EPC rating is higher than E, unless there is an exemption in place.


Of course the aim is to reduce the number of poor and unsuitable rented properties and hopefully the number of properties affected will be few.


But landlords may find it useful to see the government’s guidance :  


If unsure about the EPC rating of your property – and if one has been carried out in the past – you can find the details by entering the postcode at the following web address:

£750 cashback on Buy to Let mortgages

Hot on the heels of BM Solutions announcement of £500 cashback on some of its Buy to Let mortgages Virgin Money go one better with a limited time offer of £750 cashback on some of their Buy to Let products. Contact ibmco to find out more.

Houses in Multiple Occupation – new rules

It seems that greater levels of regulation are never too far away, and there will be an extension of HMO licensing from the 1st October 2018. 

In effect, the definition of a HMO will be changing, bringing an estimated additional 177,000 properties under the HMO rules, meaning they will also need licensing. Under the new rules any property which is occupied by five or more people, comprising individuals from two or more separate households – regardless of the number of storeys in the property – will be classified as a HMO from October. 

If you own and let a property which will fall into this category ideally you should be thinking ahead and finding out from your local authority what the requirements will be for a successful licence application.

The good news is that ibmco can help raise finance and remortgages for shared letting properties whether a licence is needed or not. So please send us your enquiries.

£500 cashback on Buy to Let remortgages

BM Solutions are offering £500 cashback on remortgages until 8th April 2018

Planning ahead with a Forward Funding Facility for Buy to Let

Planning ahead with a Forward Funding Facility

Let’s suppose you are applying for a Buy to Let mortgage for a new property purchase and you plan to buy more properties in the near future; or, maybe you are applying to remortgage an existing Buy to Let to release capital which you will use as deposits for future purchases.

Why not take the opportunity at the same time to apply for a facility sufficient to cover the expected additional new mortgages?

As a simple example, lets say you are raising a mortgage on an existing unencumbered property to raise £200,000. You plan to use the cash raised to purchase 4 additional properties at around £200,000 each putting in a 25% deposit on each. So your initial mortgage application is for £200k and you anticipate needing 4 further mortgages for £150k each – a total of £600k. It’s possible to request a forward funding facility of £600k on top of the initial £200k application.

So you now have your funding in place which means:

  • A shorter and quicker application process for further properties
  • You are in a strong position to negotiate your purchase because you can demonstrate availability of funding and promise quick completion
  • You can even consider, for example, auction purchases

Of course the property itself must be acceptable to the lender and a valuation survey will be required but as an applicant you are pre-approved. Applicants must be ‘portfolio landlords’ i.e. own more than 3 let properties and can be individuals, partnerships or limited companies.

There is no additional cost in setting up the facility so it really makes sense to do this.

Contact ibmco for further details


Increasing and decreasing

Lloyds Bank announces it is reducing its interest rate by ‘up to 30 basis points’ across its Commercial Mortgage range for Real Estate and Healthcare.

BM Solutions (a member of the Lloyds Banking Group) announces that from tomorrow February 16th 2018 its fixed rate and tracker Buy to Let Purchase products will increase by 0.2%. To be fair, BM’s products had recently looked very attractive in comparison with the market so this adjustment is probably expected.

Property Investing using a Limited Company

Why buy Properties in a Limited Company name?

Buy to Let mortgage lenders – if the borrowing is in a limited company name – will invariably expect directors to give personal guarantees so the reason for borrowing in a limited company name is not to escape personal liability.

Buying properties in a limited company may be beneficial from a tax point of view although ibmco does not advise on tax and we strongly recommend to that you seek professional tax advice before making any property investment decisions.

Also, limited companies are not subject to the stricter affordability checks on personal Buy To Let borrowing which was introduced by the Prudential Regulation Authority on 1 January 2017. This means that a limited company may be able to borrow more against a property than a landlord borrowing personally.

Limited companies pay Corporation Tax, not Income Tax, and as such are not affected by the changes to tax relief on finance costs for personal BTL borrowers. However, the owners of the company will then need to extract the net income from the company – usually by way of salary or dividends – at which point income tax on the salary and/or dividends will become due. Everyone’s circumstances are different so please take professional tax advice.

Borrowing in a Limited Company name – the application process.

Generally speaking, when assessing a Buy to Let mortgage application, lenders will carry out background checks on the directors/shareholders just as they would on individuals applying in their own names. Therefore there is very little difference in the application process.

The depth of the underwriting may depend on the number of properties owned (lenders carry out more detailed underwriting on portfolio landlords) – but this is true of both individuals and companies. If an application is made in the name of a brand new company, clearly the company itself has no history to check, so the underwriting must be based on the shareholders/directors. (It is perfectly acceptable if buying a property for investment purposes to apply for a mortgage in the name of a brand new company).

Most Limited Company Buy to Let applications are in the name of SPV companies. SPV means Single Purpose Vehicle and means that the company is formed solely for the purpose of property investment. More about this below. However if you are borrowing in the name if a company which also trades in another way the application may be more complicated as the lender will need to examine the company’s trading history and financial strength as well as the proposed property transaction.

Advantages and Disadvantages of borrowing in a Limited Company name.

It may be possible to borrow more on a Buy to Let mortgage in a Limited Company name than in a personal name. This is because lenders take into account the borrower’s potential tax liability in their affordability calculations. They will expect the rent which a property generates to cover the interest cost by a certain margin and this margin will be higher for higher rate taxpayers. (Remember that gross rental income for individuals is now counted towards taxable income so many landlords will be in higher tax brackets). Application of this rental assessment may put an upper limit on the amount that can be borrowed. Limited companies are not subject to the same tax rules so are usually assessed on the least restrictive affordability calculation equivalent to a basic rate taxpayer.

On the other hand, not all Buy to Let lenders will lend to limited companies so the choice of lender narrows (although there is still a good range of lenders for limited companies). In effect the interest rate a limited company pays may be slightly higher than could be achieved in an individual name. But these days there are competitive terms available for companies.

Some limited company lenders have no restriction on the upper age of directors.

Setting up a Limited Company to invest in property

You can of course ask your accountant to set up a Limited Company for you, but the process is very simple and you can do it yourself at a cost of around £15. See

Once set up you will have some responsibilities such as filing accounts annually and an annual ‘Confirmation Statement’.

Part of the set-up process is choosing an SIC (Standard Industrial Classification) code for the company. A company can have several codes, but we’d suggest the correct ones to make sure your company is an SPV vehicle are :
68100 Buying and selling of own real estate and 68209 Other letting and operating of own or leased real estate
Apart from the incorporation of a company you can only change the SIC code when filing the annual Confirmation Statement but since you can choose to file the annual statement at any time this doesn’t cause much restriction. Therefore you can re-classify an existing company to make it into a SPV property investment company. An example would be where the owners of a trading company owning its own premises decide to retire or close down the trading business and in future simply rent out the company’s property.

Does it make sense to transfer properties in personal name into a Limited Company?

Legally, you can’t simply ‘transfer’ properties into a limited company, what you have to do is to sell the properties at market value to the company. This means (a) that you may create capital gains tax liabilities for yourself and (b) the purchase by the company will be subject to the current rates of stamp duty, including the additional rate for property not purchased for residential use.

Please consult your accountant or tax adviser.

Houses in Multiple Occupation (HMOs)

A HMO is defined as a house where multiple unrelated tenants have exclusive access to their rooms but share common areas such as kitchen and bathroom.

The tenants may all sign one and the same joint tenancy agreement, or each may have their own tenancy.

Properties of 3 or more storeys and occupied by 5 or more unrelated occupants are required by law to be licenced by the Local Authority. Different local authorities have different rules regarding properties of less than 3 storeys or less than 5 occupants so it’s important to check the rules for your area. Licencing requires adhering to rules regarding safety standards.

Tenants in this type of property include for example students, tenants on benefit support, tenants placed by the local authority, asylum seekers and of course working people.

Generally speaking such properties require more hands-on management by the landlord but there is often a high rental return which is why such properties are attractive to property investors. Sometimes the entire property can be leased to a specialist property management company which then assumes responsibility for letting and maintaining the property.

ibmco has a panel of lenders who will provide Buy to Let mortgages for HMO properties and welcomes enquiries.

In 2018 further legislation is expected which, if the government’s consultation document is followed, will extend licencing requirements in England to any property occupied by 5 or more tenants if more than two of them are unrelated irrespective of the number of storeys. Requirements may include minimum room sizes as well as stricter checks on landlords applying for licences and rules governing refuse disposal. We await further developments.

BM Solutions new Buy to Let Purchase products

BM Solutions announce two new products for Buy to Let purchases only

1.45% 2 years fixed up to 60% loan to value

1.86% 2 years fixed up to 75% loan to value

Product fee £1,995.

BM also offer remortgage products with free valuation and legals but rates differ from those quoted above.

BM lend throughout the UK, to individuals (not companies)

Subject to BM’s criteria please contact ibmco for further information.

Portfolio landlords 5 year fixed rates from Foundation Homeloans with £500 cashback

In addition to their standard range, Foundation announce products for portfolio landlords only ( 4 or more mortgaged properties) with £500 cashback

Standard Properties 3.89% fixed until 30 April 2023

HMO Properties 3.99% fixed until 30 April 2023

Up to 70% loan to value, individual or limited company applicants. £500 cashback on completion of the loan. 1% arrangement fee.

Rental calculation allows up to 212 times (for individuals) or 240 times (for companies) monthly rent.

Contact ibmco for further details


No portfolio limit on New Street Mortgages applications

There is no longer a limit on the number of properties a landlord owns when applying to New Street Mortgages. Subject to a maximum exposure with New Street of £2m per client.

As part of the Kensington Mortgage group New Street hope to start lending in Scotland shortly (see earlier post) – currently lending on properties in England and Wales.

Further information available from ibmco, please get in touch.