Mortgages 

Hinckley & Rugby launches BTL limited company range

Hinckley & Rugby launches BTL limited company range

Hinckley & Rugby Building Society has launched a buy-to-let range for limited companies, exclusively available through mortgage distributor 3mc.

The society will offer a two-year discount product and a two-year fix to 3mc mortgage intermediaries, designed for properties held within special purpose vehicle (SPV) limited companies.

The two-year discount is available at 2.99 per cent and the two-year fixed rate at 3.30 per cent, both with a maximum loan-to-value of 70 per cent.

Both products have an application fee of £250 and completion fee of £1,250, with an interest coverage ratio affordability assessment of 125 per cent at 5.5 per cent.

Doug Hall, director at 3mc, said: "Our exclusive pair of limited company buy-to-let mortgages from Hinckley & Rugby offer both great rates and the building society’s manual underwriting and individual consideration of all aspects of applications."

Mr Hall said with the current and recent tax and regulatory changes in the buy-to-let sector, having the ability to consider a corporate structure to ownership provided investors with more opportunities.

Carolyn Thornley-Yates, head of sales and marketing at Hinckley & Rugby, said: "As a 'can do' lender, we are pleased to be partnering with 3mc in introducing limited company buy-to-let which is an increasingly sought for alternative approach.

"There is a relative lack of lenders offering mortgages to be held in the name of a limited company, so we look forward to 3mc bringing our competitive products to brokers and their customers."

Earlier this month, figures from Shawbrook Bank showed a landlord exodus to limited companies as many thought to navigate the impact of tax changes on buy-to-let profitability.

The introduction of an additional 3 per cent stamp duty surcharge in April 2016 was closely followed by the abolition of mortgage interest tax relief for landlords, to be phased down to a 20 per cent flat rate in 2020, further pushing the limits of landlord profitability.

Shawbrook Bank said the reduction in mortgage interest tax relief had led to an increased professionalisation among landlords, with those in a private limited company able to treat interest payments as business expenses to be offset against profits. 

David Hollingworth, associate director of communications at London & Country Mortgages, said it was good to see lenders like Hinckley & Rugby launch a limited company proposition, which had previously been the preserve of some of the more specialist players.

He said: "Over time that added choice should help to improve the product options for landlords looking to build a portfolio."

Mr Hollingworth added: "There’s a lot of talk about the direction of the buy-to-let market given the raft of change that has impacted activity in recent years - the changes to tax relief feature highly in that discussion, especially when it comes to limited company buy-to-let.

"As awareness of those changes grows and landlords understand the structuring of buy-to-let within a limited company to a greater degree, the market for limited company mortgages is growing." 

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