BTL borrower overexposure limits?

BTL borrower overexposure limits?

13:49 PM, 11th June 2021, About 3 years ago 11

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My husband and I jointly own a lovely Victorian terrace with 5 flats. We own the freehold (yes, in different name), as well as the leaseholds of all the flats as joint owners.

We did major renovations and upgraded to top-spec when we bought the building, remortgaged the flats and the 5y mortgages are just coming up to renewal in the next few months. I contacted our mortgage adviser and was told that no one (no high street lenders) will remortgage due to “overexposure”.

Apparently, they will not lend as we own all the flats in the building. I do recall, from the previous round of mortgaging, that lenders had a maximum number of properties they were willing to lend on within a block or street or postcode (i.e. it was their exposure as lender they were limiting). But I’ve never heard that all lenders would frown upon a borrower owning all the flats in a building – why would they if they as a matter of process limit their own exposure to a location?

We have no problems letting the properties, it’s in a desirable location of a major town, we get top dollar rents, very high-quality tenants and have an excellent rental history. I find this blanket statement puzzling. Can anyone shed any light on this please?

Many thanks


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14:05 PM, 11th June 2021, About 3 years ago

Try Kent Reliance or Zephyr
I have multi unit lending with them. Under one freehold.
Expensive set up fees and interest rates but I use it for further projects
Otherwise you'll have to try and mortgage each one


14:10 PM, 11th June 2021, About 3 years ago

If you are renting these out and not to sell, you didn't need to put leases on each flat, just kept the freehold. You will most likely have to go down the commercial route and loan from a commercial lender, the interest tends to be higher.
I have two flats in a block of 4 and mortgaged them each with a different BTL lender, so you may want to try that route. Also sounds like you need a good mortgage advisor. I wanted to buy a new house to live in and BTL mortgage the old one to pull out the money as deposit. The advisor I used for some of my BTL said no chance, I went to a specialist advisor and he said yes no problem and it wasn't a problem and with a high street lender that the other one said was impossible.

Howard Reuben Cert CII (MP) CeRER

14:28 PM, 11th June 2021, About 3 years ago

Hello Binks

Re "I do recall, from the previous round of mortgaging, that lenders had a maximum number of properties they were willing to lend on within a block or street or postcode (i.e. it was their exposure as lender they were limiting)"

..... you are correct and we know the lenders who will still allow this within their criteria.

If you have your flats all on leasehold arrangements then you are of course now formally known as a 'portfolio landlord' ,and not all high street banks now lend to portfolio landlords (ie 4 or more BTL mortgaged properties), however there are still many that do.

There are also specialist lenders and broker only lenders that we can provide you with access to.

For a personalised mortgage service, from specialist BTL mortgage brokers, contact me via my profile link enquiry form and me and my Team would be pleased to help.


Mick Roberts

15:59 PM, 11th June 2021, About 3 years ago

Reply to the comment left by Howard Reuben CeMap CeRER at 11/06/2021 - 14:28
Yes Howard, they was chucking money at me in 2007, Would u like a £ million sir?
Even lenders limits like 5 with the Coventry, gave me 6.
24 with the Woolwich.

Now Ooh no Mick, if u got more than 4 houses, u a big risk, sort it out on yourself mate.


16:21 PM, 11th June 2021, About 3 years ago

Thank you all for the feedback so far. Just to clarify - we’ve mortgaged all the flats individually 5 years ago without any major issues. I’m aware we are classed as portfolio landlords, but there are still plenty of high street lenders that lend in that scenario. All our existing mortgages are currently with high street lenders.
What I have been told this morning as a follow up is actually a different rationale of why my lender of choice had an issue, which is apparently us owning the freehold as well as all the leaseholds (so in fact nothing to do with overexposure). I’m told most banks think that control over the freehold makes it possible for a borrower to ‘fight them harder’ if they were to try to repossess. I’m baffled that there isn’t a simple legal way of getting around that concern - surely at least some of the banks have figured something out?
Clearly, I’m trying to avoid ‘specialist’ lenders as their rates and fees are often extortionate.
Knowing now the actual issue, my broker is working through the lenders to see who is comfortable with this.
But if anyone here is aware of any particular lenders that don’t have a problem with the ownership of controlling freehold interest, I’d be grateful to hear! Thanks again

Nicholas Dickinson

8:07 AM, 12th June 2021, About 3 years ago

Reply to the comment left by Binks at 11/06/2021 - 16:21
Transfer the freehold into a company with five shares (one per flat). You then have a standard structure where the owner of each lease holds an equal share in the freehold.


18:49 PM, 12th June 2021, About 3 years ago

Hi Binks

I have exactly the same problem, only lenders who would do it are Precise and Paragon but there may be others, you'll need to go through a broker. 25% of a block is the usual limit. Yes this is a recent thing. Precise also tried to take a charge on the freehold but fortunately I managed to bat that away as it was a remortgage and they hadn't done so the first time round. I am afraid the rates are a bit higher. Whilst annoying, I console myself with the fact that for 10+ years we have had infinitesimally low rates so will still be lower than it might have been.


18:50 PM, 12th June 2021, About 3 years ago

Reply to the comment left by Nicholas Dickinson at 12/06/2021 - 08:07
Unfortunately they won't accept that, you have to give personal guarantees so the same rules apply


21:23 PM, 12th June 2021, About 3 years ago

Reply to the comment left by Crossed_Swords at 12/06/2021 - 18:49
Thank you, it’s a strange one isn’t it, but good to hear from someone with the same experience. I was told my current lender for the flat I’m currently remortgaging doesn’t accept new clients with this ‘feature’, but are willing to switch to a new deal, so that’s an option. Interesting regarding the “charge on freehold” suggestion - do you know how exactly that works? And how other lenders for the rest of the flats would feel about that? Could two or more different lenders have a charge on the freehold in some form? In any case, I will be using my own solicitor, so I will ask about this ahead of time.
On a different note, I’ve had very poor experience with Precise some years ago with a bridging loan, so still feel quite weary of them, have they been ok with your BTL?
Again, thanks for the feedback!


23:40 PM, 12th June 2021, About 3 years ago

Not really, Precise insisted on a remortgage as opposed to a product transfer with all the fees that entails. Then they tried to place the charge on the freehold, I think this is a recent thing too. I don't think it affects other lenders as the freehold is unencumbered, unless they too try to pull the same stunt.

In your case could you not wait until all of them are ready to remortgage and get a multi unit one? it's what I would do except I don't own one of the flats so is not option for me. Paragon do this, I have had good service over 20 years with them although the rates might be a bit higher. Can't get on their site just now, they have limited hours

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