Shawbrook reduce rates on Ltd Co BTL to aid landlords post budget

by Malcolm Jones

9:56 AM, 27th July 2015
About 3 years ago

Shawbrook reduce rates on Ltd Co BTL to aid landlords post budget

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Shawbrook reduce rates on Ltd Co BTL to aid landlords post budget

Following the announcement in the ‘Summer Budget’ by the chancellor George Osborne that Landlords will will only be able to offset mortgage interest at the basic rate of tax (20%) by 2020, many landlords may feel there investments are under risk.Shawbrook

Landlords at current are allowed to view their mortgage interest as another cost, deducting it from their profits before they pay tax. Effectively meaning that some of the wealthier landlords achieve tax relief at 40% or 45%. Under the chancellors new rules this tax relief will be restricted to 20%.

Although the announcement may not be a shock to some, with the Bank of England stating that the buy-to-let market was “a risk to financial stability”, for many it was a sign that the generally unpopular buy-to-let market could potentially come under fire.

To overcome this change, many professional landlords are now looking to reduce tax by moving their existing portfolio into, or make new additions to it under a Limited Company or SPV (single or special purpose vehicle).

Challenger bank ‘Shawbrook’ has once again seen this change in the market and adapted its product range accordingly. From today, a new product has been released which allows for reduced rates for professional landlords, LLP’s and Limited Companies.

“Rates starting from 3.79% above LIBOR – available for professional landlords, LLP’s and limited companies”

With lending to Limited Companies historically quite restrictive and viewed as expensive. This new product allows Landlords to reduce their tax liability at more competitive rates.

So if you currently have a portfolio you wish to finance through a limited company, or wish to acquire new properties through one, Shawbrooks new product range may well be suited to you.

Please do not hesitate to contact me on the form below if we can assist you with this 🙂

Contact Malcolm Jones

Commercial Finance, Development Funding and Bridging Finance
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Comments

Neil Patterson

9:59 AM, 27th July 2015
About 3 years ago

Excellent news Malcolm and great to see a lender being so proactive in the market 🙂

Jireh Homes

16:05 PM, 27th July 2015
About 3 years ago

Nice to see the mortgage lenders being proactive, although will be interesting to see how the eligibility requirements have changed!

9:00 AM, 29th July 2015
About 3 years ago

Hi malcom

Could you give is examples please of eligibility examples please. What would typical ltv be.....and would products be available for an investor moving their first property into a newly formed special purpose limited company.

Brooklands Commercial Finance

9:27 AM, 29th July 2015
About 3 years ago

Reply to the comment left by "James Tallis" at "29/07/2015 - 09:00":

Good Morning James

Shawbrook have a suite of products that include short term loans, light and heavy refurbishment loans, commercial mortgages and residential BTLs. These mortgage's are available on interest only up to 10 years and capital or part capital repayment up to 30 years. They have variable and fixed rates. They will lend to individuals, partnerships, limited companies and Ex Pats. With regards to the article this refers to a new product that they launched this week. It is for simple residential BTLs. The 3.79% margin is up to 60% LTV and the margin up to 75% LTV is 4.1%. Both have a lenders arrangement fee of 1.5%. They are happy for an investor to move his property in to a special purpose ltd company. Please do not hesitate to contact me on 08455 488002 if I can be of further assistance.

Ramus Wood

19:06 PM, 29th July 2015
About 3 years ago

It's a margin over "LIBOR" - what LIBOR is it? 3m? Or a different duration ? 3 month LIBOR is around 0.58% pa today whilst 12m LIBOR is around 1.07%.

Thanks


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