Mortgage Express has extended its proposition in the buy-to-let market with the launch of a product for limited companies.
Previously, Mortgage Express only offered buy-to-let mortgages to individuals. Roger Hillier, product development manager for the lender, said: ‘We are aiming to consolidate our position as market leader by extending our range of buy-to-let products to accommodate customers wishing to shelter their investments in a limited company.’
‘Investors have enjoyed profitable investment in the buy-to-let market over recent years and many are expanding their portfolios. Many of our buy-to-let customers have two or more properties in their portfolio. As their investment grows, so does their potential tax liability and for many setting up a limited company to buy manage and let property can produce a better taxation result on income.’
Two products are available, with one relying on a personal guarantee from the borrowing company’s directors. With the guarantee, the top loan to value (LTV) is 85%, with a variable rate of bank base plus 1.75%. Without guarantees, Mortgage Express will offer 70% LTV and a variable rate of bank base plus 2.25%.
City investors have, in the past, questioned Mortgage Express’ parent Bradford & Bingley over its exposure in the buy-to-let market.
One City analyst said: ‘There is general caution from investors about the buy-to-let market that if there is downturn in the housing sector it will be the first to produce bad debts. However, if the risks are priced properly and LTVs are kept in check they could do well.’
Hillier added: ‘We have no real concerns as the quality of the business is good, and we have a conservative loan criteria in place.’