Myth Busting British Buy-to-Let

by
GetGround

Britain's limited company buy-to-let mortgage market is often characterised as inaccessible and expensive, for UK-residents and international investors alike. This deters many from the high risk-adjusted return of this asset class. For them, it's neither worth the hassle, nor even looking into, despite the potential upsides.

But the UK’s mortgage market has moved on and limited company buy-to-let mortgages are becoming a standard feature in lenders’ product ranges – no longer are mortgages offered only to investors in their personal name. More banks and specialised lenders than ever are offering limited company buy-to-let mortgages, and this injection of competition is streamlining application processes and putting downward pressure on interest rates.

Almost two-thirds of UK buy-to-let lenders offer mortgages to investors seeking to invest in property through a limited company structure, research analysed by GetGround can reveal. The research found that, of the UK’s 75 leading buy-to-let lenders – including Nationwide, Barclays, Paragon and Aldermore – at least 50 accept limited company borrowers within their eligibility criteria.

The research also found that a growing number of lenders are offering company borrowers comparable rates to those offered to individual borrowers with property registered under their own name. According to price comparison website Moneyfacts, some buy-to-let lenders offer 2-year fixed mortgage rates below 3% for limited companies. The average buy-to-let rate for individual borrowers for a 2-year fixed is 2.95%.


Historically, these affordable prices have not been on offer to landlords seeking to invest in property under a company structure, with mortgage providers offering individuals more favourable terms. 

This increase in availability mirrors the rising number of professional landlords choosing to hold buy-to-let properties inside a company structure, rather than under their personal name.

In 2020, a record 41,700 new limited companies owning buy-to-let properties were formed, meaning that, on average, close to 3,500 new companies were added each month to the current UK pool of 500,000. This is a sizable jump from five years ago, when just 14% of buy-to-let properties were purchased through a company, compared to almost 60% in 2020.

More investors are choosing this route to diversify their assets, as Britain's mortgage market has become more sophisticated, easier to access and more affordable.


The market remains competitive for British expats

Even if a UK resident chooses to leave the UK and live somewhere else, the British mortgage marketplace is still very accessible. A third of lenders reviewed by GetGround accept applications from British expats seeking a buy-to-let mortgage under a company structure.

Although eligibility criteria vary, the availability of more competitive rates and products is often skewed towards particular profiles that demonstrate established financial stability or experience in managing property, such as employees of blue-chip companies, high-net-worth individuals and experienced landlords.

In comparison, opportunities for non-British international residents are sparse. Our research found that less than a dozen well-known mortgage lenders offer buy-to-let mortgages to non-British non-UK residents. This limits their opportunity to invest in the UK’s thriving real estate market, despite having the funds to buy and expertise to run a rental property.


GetGround is streamlining this process

Although the buy-to-let mortgage marketplace has seen significant shifts in recent years, the application process is still time-consuming and stressful, if the correct company structure and procedures are not in place.

Landlords seeking to operate their property under a limited company still have to meet particular requirements across their own profile as a potential borrower, their chosen property and the type of loan they are after. This involves lots of paperwork, a good credit score and a completed company registration. 

And even if an individual does meet all requirements, a lender may reject an application to manage the concentration limits of its current loan pool or due to limited credit appetite. Thus creating additional uncertainty for buy-to-let investors.

This is where GetGround comes in. Through partnerships with established UK mortgage providers, our team is building the infrastructure to streamline the application process. We simplify the paperwork, speed up the process, and reduce the uncertainty to make it easier, faster and more cost-effective for investors globally to make the most of the UK’s booming property market.


Ready to get started, or looking to learn more? Click on the button below.

Need help forming a company? E-mail us at info@getground.co.uk for more information.

GetGround

Read more

Finance image

Beginner's Guide to Houses in Multiple Occupation

HMOs are much more profitable than other BTL options. But before you take the plunge, make sure that you know what the legal requirements are so you don't get caught out!

Finance image

Benefits of a Limited Companies Outside of Tax Efficiencies

Although buy-to-let limited are beneficial from a tax efficiency perspective, they also provide a multitude of other benefits to the investor.

Finance image

Brief Read: What Is Conveyancing?

If you’ve bought or sold a property, chances are you have dealt with a conveyancer at some point. Conveyancing is the legal transfer of property from the current owner to a new owner.

Finance image

Should I Remortgage My Buy to Let Property? 

Remortgaging your buy-to-let property can be a reasonable decision that reduces your costs or raises extra money to fund newer investments.

Finance image

Should You Go With an Interest-Only Mortgage or Repayment?

If you are applying for a mortgage, you’ll likely have to choose between an interest-only mortgage or a straightforward repayment. Why are interest-only mortgages most common for BTL investors?

Finance image

What Is a Buy-to-Let Mortgage?

Many investors are now buying portfolios of properties to rent out. This may require a special buy-to-let mortgage. On the surface, this is similar to residential mortgages but with a few key differen

Finance image

In-depth Review: Tax Efficiencies in Buy-to-let Companies

A key reason many investors choose to hold a property under a company structure is due to tax efficiencies. For this article, we will be focussing on clarifying the overall tax efficiencies.

Finance image

9 Best Places to Invest in Manchester/Northwest

Manchester is growing in popularity with investors. Not only is it the most significant economic hub outside of London, but it’s also being revitalized with numerous job opportunities for residents.

Finance image

Top 10 Areas In London For Rental Yield

London is offering excellent rental yields for 1-3-bedroom properties. According to Foxtons, these are the ten areas in London with the best rental yields.

Finance image

Myth Busting British Buy-to-Let

More banks and specialised lenders than ever are offering limited company buy-to-let mortgages, and this injection of competition is streamlining application processes and lowering rates.

Finance image

Meet Your Landlord: An Interview with Ian

In this GetGround interview, we speak with one of our clients on his journey to becoming a landlord. We learn about how he first got into buy-to-let property investing, among a list of other things.

Finance image

Why is Mortgage Lending Surging?

The UK is experiencing historic highs in mortgage lending as home movers scramble to find more space at better rates.The UK experienced a surge in mortgage lending in the first few months of 2021. Tot

Finance image

5 Tips to Find The Right Tenant

Becoming a landlord is a profitable and enjoyable venture, but the wrong tenant can put your income and investment in jeopardy. Follow these tips and find the perfect tenant. 

Finance image

GetGround and Molo Strike Partnership

‍GetGround and Molo, announces a distinctive new partnership that executes all the essential administration underpinning Buy-To-Let (BTL) purchases in one fast and comprehensive service. 

Finance image

Stamp Duty Holiday: What Happens After it Ends?

The stamp duty holiday has encouraged a rush of property purchases this past year. This has led to rising house prices. What will happen after the stamp duty hliday ends?

Finance image

4 Things You Need to Do as a Landlord

New laws and regulations mean that landlords can face massive fines if they fail to do their due diligence. Make sure to do these four things to stay on the right side. 

Finance image

Buy-to-let Limited Companies: What Do I Need to Know and Do?

In this animation series, we cover key questions on how to form, optimally structure, and manage your buy-to-let limited company. We cover key basic concepts, and clarify some key misconceptions.

Finance image

The Pros and Cons of New and Old Builds

Deciding whether to purchase an existing home or a new building can be difficult. Here are the pros and cons of each for prospective landlords.

Finance image

Is It Cheaper to Rent a Home Than Buy to Live In?

The pandemic has had an incredible impact on the property market. For the first time in six years, it’s cheaper to rent a home than buy it. What does this mean for buy-to-let investments?

Finance image

Are Leaseholds Harder to Sell and Maintain Than Freehold?

If you’re buying a property to let, you might be faced with a choice between a freehold and a leasehold. What is the difference between each of them, and are leaseholds right for you?

Finance image

How Do Investors at Different Ages Look at Buy-to-Let Investing?

A recent survey by GetGround found that landlords younger than 40 are significantly more likely to purchase more buy to let properties in the future.

Finance image

GetGround Learning Series: Tax Efficiencies

During this video, we go over key tax considerations when using a limited company to hold your buy-to-let properties, including how you should think about extracting profits, estate planning, and more

Finance image

Buy-to-let Investing: A Safeguard Against Inflation?

Investing in real-estate is often seen as a natural protection against inflation. Why is this important, how does this work, and why should this factor into your investment decision-making? 

Finance image

UK Housing Prices are at Record Levels - What Does this Mean for New and Existing Investors?

UK housing prices are currently at its highest level. Does this mean we are in a bubble, or are we in a "new normal"? Should I start entering into the market or wait it out?

Finance image

Top 10 Areas to Consider For Your First or Next Buy-to-Let Property Purchase 

Before executing a buy-to-let strategy, determine your investment goals. Are you looking for capital growth or a monthly income? Consider these areas for your first or next investment.

Finance image

Capital Appreciation vs. Rental Yield: What Matters More and Why? 

Before you start your buy-to-let investing journey, make sure you understand the difference between capital appreciation and rental yield - this can ultimately help decide where you invest.

Finance image

4 Things to Consider Before Becoming a Landlord

Are you thinking about becoming a landlord? Weigh all the pros and cons before making a decision and make sure to consider these 4 topics before starting.

Finance image

Brief Read: Buy-to-Let Market Enjoys Surge of Interest from First-time Landlords

Buy-to-let market enjoys surge of interest from first-time landlords despite the private rented sector proving challenging for some landlords due to tax and regulatory adjustments.

Finance image

4 Reasons Why Buy-to-Let Remains Attractive, and Lucrative

The UK’s buy-to-let market has acted as a safe (but highly rewarding) pair of hands for investors across the world for decades. This article explains four key reasons why.

Finance image

How Do I Set Up a Buy-to-Let Company? Part 3/3

In this final instalment of our trio of blog posts, we take a look at the various legal documents required, and common pitfalls, when forming a company. 

Finance image

Video: A Smarter Way to Purchase UK Property

Our very own Chris Frame joins One Global Property Service's Regional Director John Koh in a conversation on how GetGround helps investor finds smarter ways to purchase and invest in UK property.

Finance image

Video: Should You Buy Property in a Limited Company?

Should you buy property in a Limited Company? In this section our very own Joey Carbonaro discusses with Luigi at LN Capital on key reasons why you should consider using a company.

Finance image

Video: 10 Things You Should Know Before Setting up Your BTL Company

In this video Luigi at LN Capital sits down with our very own Joey Carbonaro to discuss how investors should structure their company, and common pitfalls investors usually make.

Finance image

GetGround Introduction

Here Moubin, our CEO, introduces the GetGround business and how we can help you purchase and manage your buy-to-let property through a company.

Finance image

GetGround Learning Series: Intro to Buy-to-let Company Formation

During this series, we help introduce important concepts around buy-to-let company formation. We aim to demystify and simplify seemingly complex topics around how to structure a company.

Finance image

GetGround Learning Series: How Do I Form a Buy-to-Let Company?

In the second section of our GetGround Learning series, we go over the building blocks of how to build a company, common pitfalls investors make, and simple solutions. Stay tuned for further videos in

Finance image

The New Normal: Professional Landlords and Buy-to-Let Companies

Professional landlords who hold buy-to-let properties inside a company structure, rather than under their personal name, are on the rise. A record 41,700 buy-to-let companies were created last year.

Finance image

How Do I Set Up a Buy-to-let Company? Part 2/3

Part 2 sharing our best practices on how to set up your BTL company. This section covers what a shareholder is, why that is different versus a director, and the cleanest share structure.

Finance image

How Do I Set Up a Buy-to-Let Company? Part 1/3

Part 1 of 3 on best practices on how to form a BTL company, covering topics such as: SIC codes, bank account, registered office. Make sure to check out Parts 2 and 3 for a fuller picture.

Finance image

GetGround: UK Budget Reaction - March 2021

UK borrowing has hit a peacetime high as the Government deals with the economic and health impact of Covid. This Budget has sought to both continue support for the economy as it emerges from what the

Finance image

The Benefits of Purchasing in a Limited Company Structure

Property investors have long been aware of the benefits of buying property within a limited company structure, however the associated costs and processes have typically been considered prohibitive.

Finance image

Introduction to GetGround: What We Do and How We Work

GetGround was founded on the principle that property investment can be made more efficient with technology. GetGround specialises in setting up and running limited companies- online, anytime and an...

Finance image

Inheritance Tax and the advantages of a limited company structure

There are many advantages of owning investment property in a limited company structure and tax efficiencies are some of the most notable, particularly inheritance tax (IHT).

Finance image

Common Misconceptions about Purchasing a Buy-to-Let Property under a UK Limited Company Structure

GetGround specialises in setting up and running UK Limited companies to purchase Buy-to-Let properties in the UK. All our companies have high quality legal documents and are designed to be tax effi...

Finance image

Ensuring High Efficiency in Buy-to-Let Property Investment

The recent global pandemic has reminded many of us that we value stability, and now more than ever it is advantageous to focus on the assets that are most likely to weather uncertain times. Propert...

Want to get notified when we post articles?

Sign up below and we will email you when a new article is posted.

Thanks! You'll hear from us next time we post an article.
Oops! Something went wrong while submitting the form.
By using this website you agree to our cookie policy