FHL expects rise in limited company BTL

FHL expects rise in limited company BTL




Landlords will start looking towards limited company buy-to-let (BTL) in future says Foundation Home Loans, as it announces a rise to the basis of rental calculations for individual applications.

From mid-June, Bracknell-based Foundation will increase the basis for individuals from 125% to 145%, amid restrictions on tax relief and the growth in rental cover by lenders. 

However, the firm’s limited company BTL products will remain unchanged at 125%.

Simon Bayley, Commercial Director at Foundation, said: “There is no doubt that with the new restrictions on tax relief which landlords can claim back and now the hardening of the rental cover calculation, the limited company option is really gaining ground for a greater percentage of landlords, particularly those who are coming to BTL at this point. 

“We have been delighted by the response to our limited company offering, which is priced at the same rate as our individual BTL products.

“Intermediaries and their landlord clients are recognising the efficacy of a limited company option and as long as there is a recognition of the pros and cons, the scales are coming down more heavily in favour of this approach.”

Simon explained that Prudential Regulation Authority’s intervention was another factor driving the move away from individual applications.

“Foundation Home Loans supports the regulator’s intervention to enhance the way that individual landlords are protected by a more rigorous affordability system, but also recognise that experienced landlords are more than capable of assessing risks surrounding exposure to repayment of a loan in the event of rental shortfall,” he added.

Foundation’s BTL offerings begin at £75,000, and have a maximum age of 85.

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