Mortgage lenders finance buy-to-let company swap

Thursday 24 March 2016

Lending companies are offering landlords a legal loophole to help them avoid the dreaded new stamp duty hike set to come into force next week.

As huge swathes of criticism are being directed at Chancellor George Osborne for his latest budget proposals, landlords are still reeling over his long-standing plans to phase in changes to tax relief from next year, while ramping up stamp duty by 3 per cent.

However, OneSavings Bank's specialist lenders - Kent Reliance and InterBay Commercial - say they are offering landlords an opportunity to avoid the controversial levy. 

They will allow second-home owners to switch their existing property from their name into a company or limited liability partnership (LLP).

Landlords given the chance to transfer their properties

With a report by Kent Reliance predicting that limited company lending will continue to rise, the bank is offering landlords the chance to transfer their properties, providing they satisfy current policy requirements.

Director of Online Mortgage Advisor, Pete Mugleston, welcomed the move.

He said: "If Kent Reliance and InterBay are now allowing existing borrowers the opportunity to effectively ‘port’ their current deals to their new companies, then this will be of great benefit, as many landlords would otherwise need to find new finance elsewhere, saving on application fees and valuation costs usually associated with arranging a new mortgage.

“With a growing number of buy-to-let lenders offering mortgages to limited companies, Precise Mortgages for example, it’s nice to see that a more competitive market it spurring on improvements in the criteria for borrowers.”

However, experts say that landlords should seek financial advice before trying to make the move.

Sales director at OneSavings Bank, Adrian Moloney said: "The chancellor’s changes introduced a clear need for products designed specifically for property investors who were moving their investments into a limited company, and needed their mortgage finance to reflect this."