In February the Bank of England raised its base rate to 4.00% – a far cry from the historic low of 0.10% we saw just 14 months ago. With interest rates increasing and the spiralling cost of living, many residential borrowers will be feeling the pinch. But it’s also a challenging time to be a landlord.

Those with properties on variable rates will likely be on the lookout for new fixed-rate deals to cut costs and avoid feeling the effects of any further base rate increases. And many landlords may also be looking for ways to reduce borrowing.

We’re also seeing an increasing number of landlords choosing to convert their business to a limited company structure, which can provide some significant benefits.

Previously, landlords with standard buy-to-let mortgages could offset their mortgage interest payments against their tax bills, but since April 2020 they have received only a 20% tax credit. Landlords with ltd co BTL mortgages, however, can still offset all their interest and will also pay corporation tax at 19% – lower than the higher income tax rate of 40%.

At The Nottingham, we’ve seen a lot of interest in our ltd co BTL mortgages over the last couple of years and we’ve been working hard to ensure we have a competitive range of products in this space, as well as common-sense criteria to make these mortgages as accessible as possible.

Key ltd co BTL criteria:

  • No minimum personal income requirement
  • No requirement to see last month’s personal and business bank statements as standard
  • We accept non-current owner occupiers 
  • Up to 15 properties in portfolio
  • Flexible deposit/concessionary purchase 
  • New landlord/new SPV
  • ICR 125% @ 5.75% for five-year fixed rates
  • ICR 125% @ 5.75% for like for like remortgages
  • ICR 125% @ 7.95% for all other lending
  • Find out more

In 2022, we also launched holiday let lending, which is another avenue landlords might choose to explore if they’re experiencing a fall in profits. While holiday lets tend to be more costly to run and maintain than the average buy-to-let, rental yields are generally higher, and borrowers will have the benefit of being able use the property for their own getaways. With our holiday let mortgages, that can be for up to 60 days a year!

Key information about our holiday let products:

  • No minimum personal income requirement
  • We accept non-current owner occupiers 
  • 32 weeks rental assessment 
  • We accept estimates of rental income from Airbnb
  • We pay a proc fee of 0.50 bps
  • ICR 160% @ 6.25% over 32 weeks for five-year fixed rates
  • ICR 160% @ 6.25% over 32 weeks for like-for-like remortgages
  • ICR 160% @ 8.25% over 32 weeks for all other lending
  • Find out more

If you do see a growing interest from your clients in ltd company BTL and holiday let products, just remember that at The Nottingham we pair competitively priced products with common-sense criteria to provide great options for all types of landlords. You can see our full product range here.