Complex made easy

BUY TO LET

With our combined 15 years direct experience working for specialist lenders – our dedicated and highly experienced team are extremely well placed to assist our clients.

Buy to Let mortgages

suitable finance options for both buy to let and corporate buy to let mortgages.

Here at VIBE, we can arrange finance for both limited companies and individuals by sourcing options from our wide-ranging lender panel.  Whether it be a first investment, growing a portfolio or a client looking to re-finance to a more competitive rate – VIBE can help, it’s what we do!

What is a Buy to Let mortgage?

A buy to let mortgage is a type of mortgage facility taken out with the sole intention of renting the property to a tenant as opposed to own occupation.

How can #teamVIBE help?

  • Up to 85% LTV (100% if additional security is being provided)
  • Individuals, limited company and overseas entities
  • Interest only or capital repayment
  • No maximum loan size
  • Loan terms from 2 to 35yrs
  • Competitive rates
  • No maximum age at the end of the term for some lenders
  • Master Broker status - access to exclusive rates and products!
  • Most property types considered including ex-local authority and non-standard construction

BUY TO LET FOR LIMITED COMPANY

Corporate Buy to Lets are typically designed for the purchase of residential property through a limited company (trading) or more commonly through a Special Purpose Vehicle (SPV)

An SPV will be a limited company that owns properties for the purpose of letting. This is popular amongst buy-to-let lenders as there are no complications or liabilities created by other activities.

There are many lenders that offer limited company Buy to Let mortgages however there are several factors to consider;

  • SIC Codes (Standard Industrial Classification)

The principal activity of an SPV is determined by its SIC code.

There are lenders that will not lend to a trading business and will insist the SPV/Limited Company has the necessary SIC codes – the main SIC codes accepted are below.

68100 Buy & selling of own real estate
68209 Other letting and operating of own or leased real estate
68310 Real estate agencies
68320 Management of real estate ona fee or contract basis

  • Tax Advice

Professional tax advice should always be sought in all cases by a professional tax specialist.  It is not a ‘one size’ fits all and so tailored advice should be sought for your own personal situation.

Some lenders will require all shareholders and directors be party to the application however there are other lenders that will only require the majority shareholders.  At VIBE we will discuss this with you at the outset in order to obtain the most appropriate finance options for you.

HOLIDAY LET

Holiday Let mortgages are becoming an increasingly popular sought-after finance requirement with demand increasing for people choosing to holiday at home in the UK.

Lenders have varying criteria requirements and we would always recommend speaking to a specialist broker in the first instance.

One key question #teamVIBE will ask at the outset is; Does the property have any restrictions to being used as a Holiday Let only or can it be let for residential purposes if required?

This will then decide what type of product is required.

How does a Holiday Let mortgage differ to a Buy to Let mortgage?
With a standard BTL mortgage, typically you will have an AST in place for between 6 to 12 months. With a Holiday Let mortgage, as it is short term stays this will not be the case.

Lenders will normally require a letter from a holiday lettings agent detailing what the expected income is/will be during low, mid and high season.

The security itself does not need to have a demonstrable record of being let as a holiday let and it is not a requirement for applicants to have experience (although some lenders may require this)

Key features of Holiday Let mortgages;

  • Purchase or re-mortgage
  • Limited company or individual applications accepted
  • Up to 75% LTV
  • Capital repayment or interest only
  • Available to first time holiday let investors
  • No max age at end of term for some lenders

Speak to one of our friendly specialist advisors today for a free, no obligation quote!

FAQs

What is an SPV?

A Special Purpose Vehicle (SPV) is a type of limited company that is set up to trade in one principle activity.

How can an SPV be used for Buy to Let mortgages?

The principle activity of an SPV is determined by its SIC code. 

 

The main SIC codes accepted are below;

 

68100 Buy & selling of own real estate
68209 Other letting and operating of own or leased real estate
68310 Real estate agencies
68320 Management of real estate on a fee or contract basis

Is there a minimum income when applying for a Buy to Let mortgage?

Whilst there are some lenders that do have minimum incomes / joint incomes – there are also lenders that do not have a minimum requirement and undertake a ‘common sense’ approach when determining affordability.

What is the criteria for a buy to let mortgage?

Criteria is vast and lender dependant – here at VIBE we have a wide-ranging lender panel for all types of scenarios. Each case is assessed on it’s own merits.

Can I undertake works to the property once I have purchased?

If works are being undertaken, you/your broker will need to make the lender aware as early as possible, ideally upon application so as not to be in breach of your mortgage conditions on completion and to avoid any unnecessary costs if term finance cannot be obtained.

 

Depending on the level of work involved, the lender(s) will usually insist you obtain short term finance initially (bridging loan) where you can either fund the works yourself or; some lenders also fund 100% of the cost of works as well as contributing towards the initial purchase price / day 1 value.

 

Please note that if a valuer deems the property to be uninhabitable – the valuation may come back with a nil value and the lender can insist you obtain short term finance.

 

Can I buy a house and rent it out straight away?

Yes, providing you have a Buy to Let mortgage in place then the security can be let as soon as you are ready.

Can I move into my Buy to Let property?

You will need to obtain consent from the mortgage lender to see if this is possible.  Standard Buy to Let mortgages are not regulated and so if you do decide to reside in the property, this will make it a regulated loan and so you will need to switch to a regulated mortgage prior to you moving in.

Can I get a Buy to Let mortgage as a first-time buyer?

Yes, there are lenders that can certainly consider first time buyers, first time investors. Typically for the more competitive rates, you can expect your case to be underwritten by the lender so that it fits their regulated criteria (as if you were going to reside in the property as your main residential home) as well as meeting their buy to let criteria requirements.

Are Buy to Let mortgages more expensive?

Yes, Buy to Let mortgages can be more expensive than main residential regulated loans however Buy to Let rates are currently at an all time low and there is not much difference between the two!

Is it illegal to rent a house without a Buy to Let mortgage?

You will need to either obtain Consent to Let (obtaining permission) from the first charge mortgage lender or, in the event you cannot obtain Consent to Let, you will need to switch to a Buy to Let mortgage so that you are not against your existing mortgage conditions.

Can I use the equity in my house to buy another house?

Yes, you can – you have several options; you can re-mortgage so that you raise the equity required or if you are already tied into a mortgage where you will be charged an Early Repayment Charge if you were to redeem the loan, then you can speak to the lender to see if a further advance is possible. 

 

You also have an option of a Second Charge mortgage if there is enough equity in your home – if the full amount of the second charge is being raised solely for an investment property it is classed as a business loan and as such, it is not classed as a regulated loan  (best to speak to a qualified mortgage broker to establish the most suitable way of raising finance)

What is a Consumer Buy to Let Landlord?

A Consumer Buy to Let loan has become known as the product for an accidental landlord. This type of product can only be used where the security is your only rental property and is not rented to a related party.

 

Examples of where a Consumer Buy to Let loan may apply are:

 

  • When you wish to use a property as security which you purchased and used to live in. This is quite common for young married couples who both owned properties prior to getting married leaving one property empty.
  • When you wish to use a property as security which you have been gifted. It is not uncommon for family and friends to gift property whilst they are alive as part of inheritance tax planning or for any other reason.


When you wish to use a property as security which you have inherited.

Can you rent to a family member under a Buy to Let mortgage?

You will need to obtain permission from your mortgage lender if a family member intends to occupy as there is extremely limited appetite from lenders due to various reasons below;

 

  • Buy to Lets are effectively businesses – mortgage lenders want to ensure they are being run on a commercial basis
  • There is a possibility that the rent paid by a family member will be under market value
  • The mortgage will be classed as regulated by the Financial Conduct Authority if a family member is to occupy and so you will require a regulated Buy to Let mortgage. What this means is that the lender and mortgage broker have to justify their recommendations in terms of suitability and affordability.

 

Please note VIBE Finance cannot arrange regulated mortgage finance and so regulated mortgage advice will need to be sought.