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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Limited company structure – what’s the maximum LTV?
What is the maximum LTV you can borrow if you want to purchase a buy-to-let through a limited company? I am looking at investing in the market for the first time and believe the most efficient way will be through and SPV but I also want to borrow at the highest LTV possible.
Also, if using this method, would you recommended using an accountant and how much do they charge?
Answer
The very short answer to your first question is 80% loan to value; however, there’s more to it than that. It’s essential the rental income supports the borrowing at this level.
You may have already done so, but I must re-itterate that it’s imperative you speak to a professional tax advisor before deciding whether to invest via a limited company or personally.
In terms of setting up the company, the official line to yes, use an accountant. In reality, if the company has a simple structure, then you can absolutely do it yourself on Companies House.
I would recommend using an accountant to prepare the company returns though; to give you a ball-park figure, mine charges £450 for this.
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Question
Can I get a mortgage on a canal boat?
Okay – I realise this is a strange one! However, I am looking into the holiday buy-to-let market and wondered if I could get a mortgage to purchase a canal boat? Thanks for your advice.
Answer
A truly wonderful idea; however, I’m afraid the answer is no, you cannot get a mortgage on a canal boat. Your best option is probably a business loan, so I would start there. Good luck!
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Question
Opening a limited company for a holiday let
I am a new buy-to-let investor and have decided to take the plunge via the holiday let market, which seems to be looking like a good prospect at the moment.
I wondered if it’s a good idea to set up a limited company to run the holiday let. Would I be able to apply for a holiday let/buy-to-let mortgage through the limited company?
Answer
Absolutely, you can obtain a holiday let mortgage via a limited company. As always, do speak to a tax adviser to ensure this is the most tax-efficient structure for you to invest in first.
It’s worth noting that holiday lets are taxed slightly differently to standard buy-to-let properties. Either way, you can invest in them using your personal name, or a limited company.
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Question
Climbing up the buy-to-let ladder
I purchased my first buy-to-let two years ago and thanks to rising house prices I have just discovered – whilst remortgaging – that my equity stake has risen significantly. I am now truly bitten by the bug and want to purchase another property.
In your opinion, how long should a new-ish landlord wait to expand their portfolio? Should I wait for the next remortgage (two years’ time) or go for it now?
I would be using income from the current BTL to make the purchase so waiting two years would mean I could remortgage and release more cash to get a lower LTV – but does this work in reality?
Answer
Stories like this make me so happy! Well done!
There is no ‘right’ answer to your question. House prices will probably rise over the next two years, as will rent. Currently, interest rates are very low, so now does present an excellent time to invest.
However, if now isn’t quite right for you, there’s no harm in waiting. My personal opinion is that the sooner you buy, the longer the period you have to experience capital and rental growth, which, as you’ve already seen, can be incredibly rewarding!
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