For experienced landlords, or for those with a large property portfolio, actively managing your portfolio to ensure you have the right mortgage rate on each property or can gear up and release equity for future purchases is of vital importance when looking to grow.

We have years of experience helping landlords do just that, in fact, we have a special team of buy-to-let advisors. It may be possible to agree on a credit line or facility for you to buy additional properties quickly and cheaply, making the most of rental and capital growth opportunities.

For professional landlords, the Prudential Regulation Authority, (PRA) have been explicit in the fact that they feel buy to let mortgage lenders should be underwriting portfolio landlords, defined as anyone with 4 or more mortgaged properties, in a very different way to those with just a couple of properties.

Professional landlords applying for a buy to let mortgage will now need to provide more information which can include the following:

1. Details of personal or alternative sources of income and associated Tax Returns, including evidence that the appropriate tax is paid on the rental income
2. Detailed Portfolio summary to include more than the standard Property Value, Rent Received, Mortgage Amount and property address provided previously. It should also include columns on costs associated with the property, for example, service charges, ground rent, lettings agent’s costs, insurances etc. In some instances, this portfolio will be stress tested to check the rent covers the mortgage payments.
3. Asset/Liability Statement
4. Cash Flow Projection
5. Business Plan and commentary

Our experts at Coreco know which buy to let lenders require what and can help ease the burden to direct you to the most appropriate lender.

Limited Company Borrowing.

Given the recent tax changes many of our landlords now want to borrow in a Limited Company rather than personal names. We strongly recommend, in fact we insist, that our clients obtain independent tax advice to ensure they are borrowing in a manner that is right for them.

If a Limited Company is the preferred route, then no worries. Our experts know exactly which lenders can help and offer you the very best interest rates to fit your circumstances.

Residential Development and Commercial Finance

For landlords with portfolios of a certain size, the line often blurs between residential investment and commercial financing, whether it is developing a site, converting a property into flats, or even building from scratch. Getting the right finance and advice in this area of the market is just as critical and can often mean the difference between turning a healthy profit or not. Our team at Coreco Commercial have years of experience in property development finance and buy to let portfolio mortgages.

Section 24, dubbed “the biggest threat landlords have ever faced”, ushered in a new era of tax changes phased in from 6th April 2017, which will come to a head in 2020. This potentially pushes landlords into a higher tax bracket, paying more tax and potentially losing access to certain benefits.
In summary, this package included the following:

•  Landlords of furnished lets could claim a wear and tear allowance of 10% of their rental income. With effect from April 2016 this relief was restricted to expenditure actually incurred.
• Mortgage interest costs could be deducted against rental profits which effectively gives the landlord tax relief at their highest marginal rate of tax. From April 2017, this relief was reduced over 4 years to the basic rate of income tax (which is currently 20%).
• From April 2016 Stamp Duty increased by 3% for landlords (and second home buyers)
• Mortgage lenders have had to adapt their rental coverage stress tests and deal with Portfolio landlords, (defined by the Prudential Rental Authority as those with 4 or more mortgaged properties), in a very different way. They have to stress test their whole portfolio, see a business plan, cash flow statement and, most importantly, see that tax is being paid correctly.
  As a result, many landlords looking at buying new properties are more inclined to purchase these in Limited Company names now rather than personal names and it is imperative that anyone looking at an investment property gets independent tax advice before they do anything.
• From April 1st, 2018, it is now against the law in England and Wales for landlords to grant a new tenancy to either new or existing tenants if their property doesn’t have an Energy Performance Certificate rating of ‘E’ or above.
• Even this is not the end; new Government rules will mean that many Buy to Let Investors will now have to become licenced HMO landlords.

Previously, a licence was only required for properties with three or more storeys that are occupied by five (or more) people from at least two households. Now this has been extended to all properties that are occupied by five or more people from two or more households – regardless of the size of the property.

However, even with all of this, professional landlords are sensing an opportunity and if you structure and gear your portfolio correctly with the right tax advice, savvy landlords can still do good business.

It is more important than ever to look for a buy to let broker who understands the current market and the numerous foibles of each individual lender. Luckily for you, we do! Managing a portfolio is a serious blend of science and art these days, but for those with the patience and an expert like us alongside them, landlords can still look forward to a rosy future.

There are a wide range of options out there for buy to let mortgages as well as the types of properties and how you plan to rent them out.

• The most common type of buy to let mortgage is someone with a single property who rents single assured short-term tenancies. These types of buy to let mortgages are generally straightforward.
• Portfolio buy to let mortgages are for those that have 4 or more rental properties. These are similar to the standard buy to let mortgage above and are designed to keep things simple for those with multiple properties. You can learn more about portfolio buy to let mortgages from the team at Coreco Commercial.
• Limited company buy to let mortgages are similar to the standard buy to let options however rather than personally borrowing the money, it’s done through a limited company as this can reduce your tax liability. It’s best to speak to a tax advisor to make sure this is the best option for you before committing.
• Houses in multiple occupation (HMO) are houses where people have their own rooms but share common facilities such as a kitchen and bathrooms. These can generate greater rental income but they can also be more complicated to manage. For more information take a look at our HMO mortgages.
• Holiday lets can be more complicated than traditional rental properties due to the short term stays and the irregular income generated from these properties. However, at Coreco we work with a range of specialists holiday letting mortgage providers.