MortgagesAug 17 2016

Precise launches limited company buy-to-let exclusives

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Precise launches limited company buy-to-let exclusives

Precise Mortgages has teamed up with 3mc, Sesame and PMS to launch some exclusive limited company buy-to-let products.

The first deal, via mortgage distributor 3mc, is targeting houses in multiple occupation (HMOs) and is also available through network partners Home Loan Partnership, The Right Mortgage and Protection Network, Sesame, Stonebridge and to directly authorised members of the PMS Mortgage Club.

Fixed at 3.89 per cent for two years, the maximum loan-to-value available is 75 per cent and it comes with an arrangement fee of £1,495.

Early repayment charges are 3 per cent until the end of October 2017 and 2 per cent until the same time the following year. The product’s revert rate is Libor plus 4.42 per cent.

Doug Hall, director of 3mc, said both HMOs and limited company buy-to-lets have become increasingly popular as investors seek higher returns.

Alan Cleary, managing director of Precise Mortgages, added: “This is an ideal time for borrowers to lock into today’s low rates and I’m sure this two-year fix will prove to be very popular.”

Meanwhile, Sesame and PMS have launched an exclusive fixed rate product to appointed representatives of its network and members of its mortgage club via Precise.

The product is also priced at 3.89 per cent and available up to 75 per cent LTV, but fixed for three years until 31 October 2019. It has a lower revert to rate than usually applied by Precise, which means that the rental calculation used to assess affordability is based on 125 per cent at 4 per cent.

There is a 1.5 per cent arrangement fee, which is payable on completion.

Sesame Bankhall Group’s senior product manager Rob McCoy also said he’s recently seen an increase in demand from our members for these types of products.

“When coupled with the recent tax changes that landlords are being impacted by, the reduced rental calculation will be a welcome support to this area of the market,” he added.

Earlier this month, Precise reduced rates for HMOs by up to 0.60 per cent a year, while limited company rates were also lowered by up to 0.55 per cent a year.

In July, Mortgages for Business figures revealed the number of buy-to-let mortgage applications completed via limited companies grew to 30 per cent of all completions, up from 21 per cent in the second half of 2015 and 18 per cent in the first half last year.

It noted the increase was due to existing buy-to-let lenders introducing limited company products in response to demand for ways of getting round the second homes stamp duty increase in April, rather than new lenders entering the sector.

Meanwhile, the average loan-to-value of HMOs increased from just 62 per cent in the first quarter, to 75 per cent in the second quarter. However, looking at the data over the last five years, LTVs on HMOs have remained fairly steady, averaging 69 per cent.

peter.walker@ft.com