The property market continues to see an increase in demand and lenders continue to reduce rates. This is creating a growing interest in buy to let, particularly with first-time landlords.
We look at some of our most frequently asked questions and look into some of the benefits of using SPV limited companies to purchase buy to let investments.
Is it difficult to obtain a buy to let mortgage?
Although this is what most new investors think, obtaining a buy to let mortgage is very similar to a residential mortgage and in most cases can offer more flexibility. You are likely to require a minimum 15% deposit, and if you have a bigger deposit you will have a larger choice of lenders with access to more competitive rates.
Can someone who has never purchased a property before get a buy to let mortgage?
In short, Yes. Although this is possible, it does mean you’ll have a smaller choice of lenders, and the lender is likely to restrict the maximum borrowing amount to a multiple of your income. That being said, many lenders are becoming more open to lending to first-time buyers. We encourage you to speak to our experienced advisers who will be able to give you more personalised information.
Can I raise a deposit by remortgaging an existing property?
Simply put, yes. If your existing property benefits from positive equity there may be a number of options available to you from a simple remortgage to second charge loans. It is best to speak with a member of our team who’d be best placed to advise you on your options.
What is an SPV Limited Company?
A Special Purpose Vehicle (SPV) limited company is a non-trading company. It is set up with the sole purpose of buying, selling and letting property.
Most Buy to Let lenders prefer lending to SPV companies, this is because, when compared to standard limited trading companies, they are far less complicated to understand and underwrite. Recently we have found that more clients are choosing to acquire and own property via limited companies. Get in touch with our team to find out why.