Who are portfolio landlords?
According to the Prudential Regulation Authority (PRA), a landlord is considered to be a portfolio landlord where they have four or more mortgaged buy-to-let properties across all lenders in aggregate.
Why does it make a difference to be a portfolio landlord?
From 30th September 2017, the PRA is bringing in new buy-to-let rules for portfolio landlords. These new standards apply regardless of whether the borrower is an individual or company. From this date, the PRA is expecting that firms conducting lending to portfolio landlords do so according to a specialist underwriting process that accounts for the complex nature of the borrower and their portfolio of properties.
What does this mean for me?
The PRA expects firms undertaking buy-to-let lending to have regard to the potential commercial nature of this type of business. The PRA expects firms to recognise that existing experience and skills acquired in buy-to-let lending do not automatically translate into equivalent skills when assessing portfolio landlords. The specialist underwriting process will assess a range of new factors.
Types of finance suitable for limited companies
Light and Heavy Refurbishment Short-Term Loans (STL)
If your client wants to carry out works on the property, they have the choice between light and heavy refurbishment products, which will depend on the amount of proposed works to be carried out.
See our Light and Heavy Refurbishment section for more details or get in touch today.
If your client is purchasing land to build property or undertaking an extensive conversion, development finance would be used. A typical loan would assist with the purchase of the land and the build costs.
See our Development Finance section for more details or get in touch today.
If the property they are looking to purchase requires no works to be carried out before letting out, a buy-to-let term loan, commercial investment term loan or House of Multiple Occupation (HMO) term loan would be suitable.
See our Buy-to-Let and HMO sections for more details or get in touch today.