Landlords should not be overcharged for Limited Company BTL

18 January 2016

Foundation Home Loans (FHL), the Bracknell based specialist BTL lender, believes that market forces will ensure that landlords do not have to look far in future to find lenders which do not overcharge for Limited Company BTL mortgages.

FHL, which announced in December that its own Limited Company BTL mortgage would be priced at the same rate as its core range, was the first to ensure that landlords were not having to pay a surcharge on the product because of its relative scarcity.

According to Commercial Director, Simon Bayley, at a time when landlords are under pressure because of tax and stamp duty changes, it cannot be right to expect clients to stump up extra just because of the novelty and lack of choice.

He said, “Certain lenders are charging up to 100bps extra for this product over their core range, when the risk is no different - effectively asking landlords to pay any tax saving from using a limited liability company structure to the lender instead. Fortunately, the intermediary community is far too canny to go on selecting lenders who decide on this kind of pricing model. As soon as they realise that there are lenders, like FHL, who are not in the market to take short term advantage of landlords keen to minimise their tax exposure, then I am sure that market forces will dictate that this kind of overpricing will quickly disappear. It certainly will not win any friends among advisers and their landlord clients in the long term.”