BTL limited company set up

[mikeh501]

DJMC said:

1/ Is it the case that nowadays a BTL investor with, say, 25 properties is somehow restricted from mortgaging any further in their personal name and may be forced to create a Ltd. Co. to buy any more with a mortgage? If so, why is this?

I dont think there are any rules per se, saying you cant have X many BTL's. I know someone with 30. However if you need funding, then the BoE introduced new rules in 2016 IIRC, which says that any individual with 4 or more BTL's must undergo a "portfolio analysis". The jist is that your entire portfolio must pass the stress test in order to get mortgage number 5. The stress test is something like 145% of mortgage payments covered by the rent for higher rate tax payers.

DJMC said:

2/ Are BTL LTVs restricted for Ltd. Co's. more so than for personal BTL buyers, or vice versa? Are interest rates the same for both classes of buyer, or does one pay more than the other?

I believe the lending market for LTD companies is more limited than those for individuals. The outcome is higher rates as there is less competition. Given a lot more people are going the LTD route, id assume this is going to chage.

[DJMC]

So said:

I could have sworn it said, "Financial Adviser" on your profile.

It still does.

[DJMC]

mikeh501 said:

DJMC said:

1/ Is it the case that nowadays a BTL investor with, say, 25 properties is somehow restricted from mortgaging any further in their personal name and may be forced to create a Ltd. Co. to buy any more with a mortgage? If so, why is this?

I dont think there are any rules per se, saying you cant have X many BTL's. I know someone with 30. However if you need funding, then the BoE introduced new rules in 2016 IIRC, which says that any individual with 4 or more BTL's must undergo a "portfolio analysis". The jist is that your entire portfolio must pass the stress test in order to get mortgage number 5. The stress test is something like 145% of mortgage payments covered by the rent for higher rate tax payers.

DJMC said:

2/ Are BTL LTVs restricted for Ltd. Co's. more so than for personal BTL buyers, or vice versa? Are interest rates the same for both classes of buyer, or does one pay more than the other?

I believe the lending market for LTD companies is more limited than those for individuals. The outcome is higher rates as there is less competition. Given a lot more people are going the LTD route, id assume this is going to chage.

Thanks for the information.

[nickfrog]

Yipper said:

Buy-to-let net investment has collapsed -80% in the past 2 years in the UK. With falling tax relief, rising stamp duty, rising interest rates, Wall Street peak and imminent Brexit, you'd have to be mental to be chasing the BTL market right now.

Not really, some really good yields out there as part of a diversified strategy. Probably not quite as good as it has been but things tend to be ever so slightly less black and white than what you may "think".

[smckeown]

I did the same 17 years ago. We got divorced 5 years ago and the tax on share reallocation from her to me was significant. If I were you I'd just make her company secretary with no shares