Landbay launches trading company BTL products and Leeds BS cuts ICR

Landbay has launched a range of products for trading limited companies that are purchasing or remortgaging standard properties, houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUFBs).

The lender noted that there were not many options for businesses which were not registered as specialist property companies.

“Most BTL limited companies are set up as a special purpose vehicle and must apply for a standard industrial classification (SIC) code which indicates they specialise in property,” it said.

“But trading limited companies can be any small business such as doctors, dentists or even brokers who want to use their firm to buy property to let out.”

It has also extended the maximum loan to value available on large HMOs or MUFBs of up to 12 beds or units to 75 per cent, up from 70 per cent.

And Landbay has removed the limit on the number of floors in a property that it will lend on.

Paul Brett, managing director for intermediaries at Landbay, said: “As one of the few lenders catering for trading limited companies, brokers now have more choice when advising company directors, who do not specialise in property.

“If small companies have surplus profits, buying property to let can be a tax efficient investment.

“Our appetite for lending has been boosted by our new £1bn funding source over five years from our new friends and partners, Allica Bank, which we announced last week.”

Leeds BS trims ICR

Meanwhile, Leeds Building Society has reduced the interest coverage ratio (ICR) which it applies on buy-to-let applications.

For basic rate taxpayers the mutual has reduced its ICR from 145 per cent to 125 per cent.

The ICR for higher rate taxpayers remains at 145 per cent, for additional rate taxpayers is 150 per cent, while for all holiday let applicants it will remain at 145 per cent.

“This change will benefit existing and potential buy to let landlords who don’t pay tax at a higher rate,” said Martese Carton, head of intermediary distribution at Leeds Building Society.

“It means our buy to let mortgages are now tailored to each customer’s tax situation, are more accessible to those who are basic rate taxpayers, and makes BTL more affordable for these landlords buying, remortgaging or borrowing additional funds.”