Ask Bruno

No, not at all. Technically the business could have been set up yesterday, so long as it's set up prior to any borrowing application, that's enough.

In short, no.

It's no different to a personal buy to let mortgage in general underwriting terms.

The strength of the application comes from the directors and majority shareholders themselves, rather than the Ltd company itself. Therefore trading accounts are not needed for new companies or SPVs.

Almost all limited company mortgages require personal guarantee's, this enables the lender to ignore the company itself and focus their borrowing decision from a personal perspective.

An SPV is simply a type of company subsidiary that is well suited to holding property and is universally accepted by buy to let lenders in this market.

It's a very simple exercise, you just need to allocate a SIC code (Standard Industrial Classification) with Companies House, as you are required to do with any limited company upon set-up, the most commonly used are;

68209 – Other letting and operating of own or leased real estate

68320 – Management of real estate on a fee or contract basis

Although there may be something that suits your business more specifically. You'll find a comprehensive list here - SIC Codes

No, limited company buy to let deals are available to a maximum of 85% loan to value. Although similarly to personal buy to let deals, there is more choice at 75% loan to value and below.

In general, mortgages are more expensive than personal equivalents. Currently there is much less choice on the Ltd company side. So you can expect to pay 1 - 1.5% more on the rate. Of course you have to also weigh up the possible tax advantages and look at the overall picture as it isn't as simple as just considering mortgage pricing.

We are seeing new lenders enter the market and we have also seen the gap closed in terms of rate differential, so deals are already getting cheaper. Watch this space for the bigger players to enter the arena - how long that will take or whether they are certain to move over, time will tell.

Yes, but you are limiting your options by doing so. The market for limited company buy to let is small compared to personal offerings and you'd be further limiting your options by going down the trading business mortgage route. You'll be offered more choice by using the aforementioned SPV, and chatting to your accountant about tax-efficient ways to move the deposit and ring-fence your property away from your day to day business.

Many lenders are accepting of your creation of a directors loan. So if you invest your own personal cash into the company, you can draw that capital from the company at a time when it can afford to pay you back, tax free, since it was paid in by yourself in the first instance.

Other ways to move cash to the newly created company include a transfer from your trading business. Again, talk to your accountant about the best way to make this happen, and we can ensure that the lender is accepting of the intended route.

Yes, however it would need to be done with care and careful consideration.

Despite the fact you may own 100% of the new business, your company would be an entirely different entity to yourself, so the word 'transfer' isn't accurate.

Your company would be undertaking a new purchase, and therefore this could trigger capital gains tax or CGT personally, and of course since it is a new acquisition, stamp duty would need to be paid by the purchasing business. So although it's a consideration, often it's an expensive move and other options take precedence.

It stands for 'House of Multiple Occupation (HMO)', basically a property let to multiple tenants. They could be students or professionals.

Well possibly not, lets give you some insight here - if we're talking about properties let to say 4 or less students or professionals, then often the property won't require a HMO licence, so assuming the tenants are on one tenancy agreement then many buy to let lenders can lend on their standard products. This means you'll get exactly the same deal as a landlord letting to one household. Increased yield with no increase in mortgage cost! It's worth noting that lenders will base their maximum loan on a one household rent despite the fact you could be receiving considerably more from multiple tenants.

With regard to licenced properties, some lenders allowing smaller HMO's only, say 4-5 bedrooms can often allow lending on their standard Buy to Let ranges also, so pricing isn't always impacted. It is true to say that you do need an expert here, a broker who understands what is allowed and what isn't. Otherwise, you could be declined upon survey having wasted a few hundred pounds. So far, we've discussed a lot of options that are available for multi-let and smaller HMO properties where pricing isn't always affected.

Once we hit 6 bedrooms plus whether licenced or the property doesn't need a licence, then yes, mortgage rates and fees tend to increase. This is mainly due to the perceived risk, and also that there is less competition in these markets and therefore less choice. Most buy to let lenders don't operate in the arena, and so the help of a specialist is often the best way to find what you want.

Technically we have lenders who have no upper limit to numbers of bedrooms, but lenders will always be risk-averse to some degree and so if they feel at risk should the property be repossessed then they can walk away. Any properties with bedrooms numbering 10 and above we will generally.

Extremely, the lowest rate we have currently available for licenced HMOs is 1.22%!

Rates are changing all of the time, so please visit our HMO page for a general idea of what's available. For a more accurate quote for your circumstances, please give us a call or get a quote here.

No, not really, other than the fact some lenders for larger HMO properties (6 bedrooms plus) will wish you to evidence landlord experience, in other words show that you have rented property for a certain period, anything from 6 months to 3 years.

For smaller HMO's and multi lets, if we're using a standard lender on standard rates, then there is no difference at all assuming the valuation fits within a lender's criteria.