Kent Reliance and InterBay Commercial, both part of OneSavings Bank, have launched a new policy to encourage landlords to incorporate their buy-to-let loans.
The new policy allows buy-to-let landlords to transfer their existing property from their individual name into a company or limited liability partnership structure.
A key feature of the new policy is that it will accept directors’ loans of gifted equity, subject to an insolvency indemnity policy.
Buy-to-Let Lender Encourages Landlord Incorporation
After the Chancellor’s announcement in last year’s summer Budget that mortgage interest tax relief on buy-to-let loans will be gradually reduced from 2017, many have viewed incorporation of a limited company as the preferred means of holding investment property.
The Kent Reliance Buy-to-Let Britain report (from November), suggests that limited company lending could exceed 56,000 in 2016, up from 30,000 in 2014.
The NLA has found that 40% of buy-to-let landlords are considering forming a limited company.
Responding to this demand, the new policy will allow both new and existing customers to transfer a property from their individual name into a limited company or limited liability partnership, subject to current policy requirements being satisfied.
Borrowers are instructed to seek professional advice from a qualified professional prior to entering into any transaction.
The policy will be even more popular after Wednesday’s Budget announcement that corporate landlords will now be subject to the 3% Stamp Duty surcharge, due to be enforced on 1st April.
The Sales Director at OneSavings Bank, Adrian Moloney, says: “The Chancellor’s changes introduced a clear need for products designed specifically for property investors who were moving their investments into a limited company, and needed their mortgage finance to reflect this.
“Our new criteria provide a solution for professional investors who wish to manage their portfolios through a limited company structure. We’ve also made sure that the process is as quick and efficient as possible for brokers and their clients.”1
1 https://www.landlordtoday.co.uk/breaking-news/2016/3/lender-encourages-landlord-incorporation