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Buy To Let Portfolio Mortgages in the UK
Author: Carl Shave - Director
Updated on August 1st, 2022

With investors continuing to grow the number of buy to let properties they own, more and more are starting to find that they are being, or have the potential, to soon be classed as a portfolio landlord.  When owning as few as four properties can bring you into this category, we thought we’d cover a few helpful topics to assist you.

What classes me as a portfolio landlord?

As touched on above, being the owner of a minimum of four buy to let properties is sufficient for many buy to let lenders to class you as a portfolio applicant. As with much of the mortgage industry this is not the line all lenders take and some may exclude any properties that are owned mortgage free. Typically, when you reach four buy to lets it is the point when you need to start taking it into consideration with any new mortgage you may wish to arrange.

How many buy to let mortgages can I have?

If owning four buy to let properties starts to classify you as a portfolio customer, how many buy to lets can you actually have?  Well, in simple terms, as many as you want. Whilst some lenders will limit how many they will permit you to hold overall and/or restrict how many you hold specifically with them, the market does have lenders that will permit an unlimited number. As you would perhaps expect, the greater number of buy to let mortgages you have, the more in-depth a lender is going to assess your financial situation. However, subject to you meeting their criteria, including on occasion, the type of property you are looking to mortgage, they will not impose a limit to how many you can have, though you can expect to have a much-reduced level of choice the greater the number of buy to let mortgages you have. But, the world is your oyster should you wish it to be if criteria is met.

What is a buy to let portfolio mortgage?

A specific buy to let portfolio mortgage is where a lender will assess the affordability of the lending based on the total level of borrowing and the total rental income generated by the buy to let properties. The lending will typically be one loan, with the portfolio of property as a whole taken as security. The main benefit of this to you as the customer is that this usually provides much wider scope and flexibility in the amount of borrowing the portfolio can provide. By taking security over all property can ensure the lender retains control over the level of borrowing should a property look to be sold or any changes are to be made to the portfolio.

Who are the best portfolio mortgage lenders?

Due to the complexity of portfolio buy to let mortgages there is a relatively low level of lenders who offer these types of loans. Who the best lender is will be determined by which one fits the remit for your own personal situation and for any future plans you may have. Varying criteria will be applied  by each lender so it is critical to know what they are to establish which may be available to you. It is likely, due to the limited appetite for this type of lending in the market, that the rates available to you will not be quite as good as the standard buy to let products. However, the greater flexibility will on many occasions make this type of facility much more advantageous to your growing portfolio plans and needs.

Is there a maximum buy to let mortgage?

There will always be a limit to how much you are able to borrow whether this is due to your own personal situation, the rentable value in relation to the borrowing or simply due to the type of property. However, if you meet all of the lender’s criteria there is scope for you to have a buy to let mortgage of any size. With a portfolio buy to let mortgage the good news is that your borrowing capacity can be judged on the overall affordability, possibly reducing the level of personal deposit or the level of equity you may need for each individual property.

Can I have a limited company portfolio buy to let mortgage?

With the increase in popularity of limited company buy to lets, lenders have widened their availability to prospective customers. This means that yes, arranging a portfolio buy to let mortgage via a limited company is possible. Do note that the limited company must be set up for this specific reason and has the relevant SIC codes to prove as such. There may also be restrictions to the number of directors the limited company can have to accommodate a mortgage, typically being a maximum of four. The minimum age for a mortgage of 18 must also be met by each director.

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