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Keystone to lend to first-time landlords and limited companies

  • 07/01/2016
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Keystone to lend to first-time landlords and limited companies
Keystone Buy to Let Mortgages has announced it will now lend products from its Classic Range to first-time landlords and to trading limited companies.

The changes are made in response to feedback from brokers and investors.

David Whittaker, managing director of Keystone Buy to Let Mortgages, said: “We talked over the proposed changes with our funding partners, Paratus AMC, and decided that increasing demand for those looking to get into property investment and borrow via a trading limited company was an opportunity not to be missed.”

“We hope that the introduction of lending to trading companies will help keep costs down for those affected by the government’s proposed tax relief restrictions.”

The tax changes, announced as part of the Summer Budget, mean the tax relief landlords can claim on their monthly mortgage interest repayments will be reduced to 20%, regardless of their personal top rate of tax. At present they can claim up to 45%. The changes will be phased in from April 2017.

The tax relief cuts have already affected the industry with over half of landlords looking to sell in November last year calling them a major factor for doing so.

In an article on the Conservative Home website, Tory peer Lord Howard Flight criticised the government’s ‘attack’ on the buy-to-let market, warning it could lead to a crash.

Keystone already lends to first-time landlords in England and Scotland who own their own home or another property, and to special purpose vehicle (SPV) limited companies, which are designed to hold property but do nothing else.

Some 23% of buy-to-let lenders currently offer products to SPVs. However, only a few will lend to trading limited companies as the underwriting process takes longer to assess and requires a wider skillset.

Keystone is urging brokers to submit clients’ Classic Range applications as soon as possible, to complete cases before the Stamp Duty surcharge deadline of 1 April.

Though it cannot guarantee all purchases cases will complete within the timeframe, it will prioritise applications submitted by 29 January.

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