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Friday, July 31, 2020

Landlords raise rents as tenant numbers grow

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House prices bounced back in July

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Tuesday, July 28, 2020

Stamp duty cut only benefited London

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Longer Notice Periods in Wales

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Coronavirus Rules for Eviction Claims

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New Stamp Duty Guide - ARLA

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Monday, July 27, 2020

Eviction notices during lockdown

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New permitted development rights

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Residential Market Outlook: KF

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Updated coronavirus guidance for landlords and tenants

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Welsh landlords need 6 months notice

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End to possession proceedings pause

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Would you use a £99 estate agent?

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ARLA - landlord taxation webinar

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Growing popularity for limited company buy-to-let

At Property Hawk Mortgages we have seen a rise in the number of limited company buy-to-let applications being submitted. So far in 2020, over 30 per cent of new mortgages each month have been in the name of a Special Purpose Vehicle (SPV) or trading company.
Popular mortgages for limited company buy-to-let (correct at date of publishing)
For standard properties:
Lender
Initial Rate
Type
Loan-to-value
Lender fee
Incentives
Bath BS
2.65%
2-year discount  
70%
£1195

Paragon
2.95
2-year fixed
70%
1%
Free valuation
TMW
3.09%
5-year fixed
75%
£1995
Free valuation
Foundation Home Loans
3.24%
5 year fixed
75%
2%


For HMOs and multi-unit blocks:
Lender
Initial eate
Type
Loan-to-value
Lender fee
Incentives
Paragon
3.05%
2-year fixed   
70%
1%
Free valuation
The Mortgage Lender
3.38%
2-year fixed    
70%
2.5%

Masthaven
3.54%
2-year fixed
75%
2%

Zephyr Homeloans
3.99%
5-Year fixed
75%
1.5%


Limited company benefits
This comes as no surprise as there are several benefits to using a corporate structure for running a buy-to-let property business. Many landlords opt to use an SPV as it can be financially advantageous and tax efficient. Since the government announced the phasing out of mortgage interest tax relief by 2020, there are now more reasons to consider the limited company route to reduce tax liabilities.
In terms of buy-to-let mortgage options, limited company products can also provide advantages to landlords as the PRA regulations relating to rent stress tests for personal applications are not applicable (a rent stress test is the calculation that lenders use to determine how much they will lend to you).
It means that the rental calculations can be more achievable for SPVs – typically at 125 per cent at 5 per cent or at the pay rate for 5-year fixed rates – which may allow applicants to borrow more through a limited company.
Wide choice of mortgages
There is growing competition among lenders for limited company buy-to-let – we currently have around 30 different lenders on our panel - which means that there are some keenly priced rates available. Historically, limited company mortgages were considerably more expensive than personal name rates, but the gap is closing with some lenders now offering the same rates for both applicant types.
Setting up an SPV is a simple, cheap process which can be completed online within 24 hours via Companies House. Most lenders will lend to newly established SPVs providing they are set up for the sole purpose of letting and managing property. For this reason, it is important that the limited company is registered with the correct SIC code – normally 68100, 68209, 68320 or 68201.
Stamp Duty costs
For existing landlords who are considering transferring their properties to an SPV it is recommended that you seek professional tax advice before proceeding. Moving properties from a personal name to a corporate entity involves a sale and purchase transaction which means that Stamp Duty Land Tax and Capital Gains Tax is payable.
Stamp Duty costs may be a deterrent to large portfolio landlords, but there are circumstances where incorporation relief may be granted by the Inland Revenue if it can be demonstrated that the portfolio is run as a business partnership – again tax advice is recommended in this scenario.
We expect the proportion of buy-to-let mortgages arranged via a limited company will continue to grow over the next 12 months as landlords realise the financial ramifications of the changes to mortgage interest tax relief now that it has been completed phased out.


Property Hawk Mortgages is a specialist in the buy-to-let mortgage market. We have a wealth of knowledge and are dedicated to helping UK landlords find the best financial products and services available to them.

Use our free online mortgage search tool at Property Hawk Mortgages
Call us now on 029 2069 5446
Visit www.propertyhawkbtlmortgages.co.uk

Friday, July 24, 2020

New possession rules

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Wednesday, July 22, 2020

Home owners permitted to add two extra floors

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Leasehold property sales could be banned

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Leasehold proposals remove barriers

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1 in 5 millennials renting in retirement

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Savills Covid advice for the rental market

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New possession rules

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New planning laws introduced

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Landlords to make shed sized flats

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Covid and prime rental markets

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Tuesday, July 21, 2020

Changes to Civil Procedure rules

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Property sales still in coronavirus slump

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Navigating the new normal in buy-to-let

The UK housing market has opened up since the end of May, with visual inspections resuming albeit more quickly in England. This means that buy-to-let mortage lenders are also returning to a more normal approach to business. However, the recovery of the market will take time.

Positive improvements in the marketplace have seen many lenders launching new product ranges, offering higher loan-to-values (LTVs) particularly in the 75 per cent LTV bracket, providing more options for landlords. However, there is still a lack of competition in the 80 per cent LTV bracket which could create difficulties for landlords who are more highly leveraged when looking to remortgage.
Now that physical valuations can be carried out, some lenders have returned to more complex lending such as on HMOs, multi-unit blocks and limited company applications. Foundation Home Loans recently launched a selection of packager exclusives for standard and large HMOs which are available through selected partners including ourselves. However, it was disappointing to see Barclays withdraw from both multi-unit and limited company lending.
There are also competitively priced buy-to-let mortgages available for standard properties from high street lenders and some excellent product transfer rates for existing customers, including a 1 per cent 1-year fixed rate currently being offered by TMW.

It is likely that the marketplace will continue to develop in the coming weeks as more lenders respond to the new normal and we may see more options in niche areas of lending such as for holiday let properties.
There has been a fair amount of concern about the impact of coronavirus on the ability of tenants to pay rent during the crisis and the effect this could have on landlords. Given the government ban on starting the eviction process before the end of August, some pundits predicted that there could be a surge in eviction applications post-Covid-19.
However, a poll commissioned by the RNLA questioned over 2000 tenants and 90 per cent had been paying their rent as usual, which suggests that a concern over a spike in evictions could be unfounded. 84 per cent had not needed any support from their landlord, and of those that did three quarters received a positive outcome.
Even though this report paints a good picture, there are some landlords having trouble collecting rent for their properties who have applied for a mortgage holiday with their buy-to-let lender. This may provide a short-term solution, but how will it affect a landlord’s ability to access finance post-coronavirus?
Although applying for a mortgage holiday will not affect a customer’s credit file, lenders may reasonably ask why it was needed.As they assess the risk of lending to an applicant, lenders will want reassurance that there aren’t any existing financial issues with the property, portfolio or business in question. This may make it more complicated for those who have taken a mortgage holiday when they seek further finance, but it remains to be seen how this will play out.
As the UK housing market gains momentum, landlords may be looking for their next opportunity to expand their portfolio and considering the most cost-effective way of doing this. There have been questions around whether landlords who run their property business via a limited company could use the government-backed Bounce Back Loan Scheme to fund further property purchases.
Small businesses can apply for up to £50,000 with no interest to pay for the first 12 months, after which the interest rate is 2.5 per cent. This could seem like a relatively cheap way to raise a deposit;however, lenders do not normally accept loans as a source of deposit and using the BBLS to profit from further property purchases is not the intention of the scheme.
Overall, the buy-to-let mortgage market is making a steady recovery and this is likely to continue in the coming weeks and months, providing more options for landlord clients.

Property Hawk Mortgages is a specialist in the buy-to-let mortgage market. We have a wealth of knowledge and are dedicated to helping UK landlords find the best financial products and services available to them.
Use our free online mortgage search tool at Property Hawk Mortgages
Please let us know how we can support you, we are here to help.
Call us now on 029 2069 5446

Wednesday, July 15, 2020

Possession proceedings during lockdown

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‘No DSS’ discrimination now unlawful

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Electrical safety standards - FAQs

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Wales stamp duty cut excludes BTLs

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House prices could drop 12% next year

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Monday, July 13, 2020

Stamp duty savings may push up prices

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UK house prices go into a gentle decline

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Camden licensing scheme renewed

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Stamp duty holiday sparks demand

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Improved PRS renter satisfaction

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Prime London property outlook

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What does the term Fleecehold mean?

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Unlicensed Welsh landlords can't serve S8/S21s

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Thursday, July 09, 2020

Post-lockdown bounce might run out of steam

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Stamp duty holiday won’t ‘fix’ market

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Sunak's stamp duty cuts

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Sector responds to Sunak's mini budget

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Energy efficiency investment welcomed

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Landlords opportunity to expand portfolios

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Stamp Duty reforms

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Buyer demand up as supply hits a low

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Monday, July 06, 2020

Can I buy a flat in my name only?

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London apartments taking 'Covid cuts'

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Number of renters in arrears doubles

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250,000 renters at risk of eviction

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High value country houses - boom

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Thursday, July 02, 2020

Gardens a must-have feature

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Property prices fell by 0.1% in the year

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ONS sheds light on housing market slowdown

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Oxford is the worst place to rent

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