Tracking Down Professional Landlord Mortgages

First-time landlords generally have an easier time raising a mortgage to fund buying non-standard properties rental properties than professional landlords with larger property portfolios.

Even though the total of mortgages on the market runs in to hundreds and the number of lenders has increased by 50% in recent years – from 46 three years ago to 69 in 2013 – professional landlords have problems raising finance.

To help solve the dilemma of where professional landlords can go for a mortgage, here’s a list of several lenders who are likely to consider applications:

Expat landlords

The vast majority of lenders will not make loans to a British landlord living overseas because of problems establishing their creditworthiness. Keystone is one of the few companies which will do so -but the expat must have left the UK less than five years ago and be employed by a British company.

Semi-commercial property

These properties like shops or offices on the ground floor with residential flats above, but where the whole building is owned by one person or company. Lenders willing to make loans on semi-commercial property include Paragon and Aldermore Commercial.

Student properties

After years of rapid growth, this is still a strong sector for investment and has a range of lenders willing to support buy-to-let landlords. They include Paragon Mortgages, Abbey, Leeds Building Society, Aldermore and Woolwich.

Many of the lenders have specific terms and conditions and will insist that the properties do not come under house in multiple occupation regulations, so they will need to see that there is only one kitchen, for instance.

HMO mortgages

In recent times mortgage lenders have been increasingly reluctant to make loans to landlords wanting to buy houses in multiple occupation (HMOs). Of those that do, most require deposits of at least 35% against the property.

Even then, many will restrict the number of tenants. For instance, many councils consider a private rented house which has at least three tenants forming separate households is an HMO, which means strict health and safety laws apply.

There are just a few mortgage lenders interested in the sector, and they include Keystone , The Mortgage Works, Kent Reliance and Paragon.

Large property portfolio investments

For several reasons, mainly surrounding tax issues, most professional landlords will have their own limited companies.

Of the few lenders interested in the sector, most will only offer maximum loans of 75% loan to value.

The lenders include Shawbrook Bank, Paragon, Kent Reliance, Keystone and Aldermore Commercial.

Mortgages for former council homes

Landlords looking for buy-to-let mortgages on former council houses and flats have struggled of late to find lenders, as many have deserted this market.

Those still willing to offer mortgages have stricter lending terms and will ignore high rise flats and homes of non-standard construction.

Currently those lending include The Mortgage Trust, Paragon Mortgages, Keystone and Leeds Building Society.


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