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FHL warns on buy-to-let Ltd company pricing

Sarah Davidson

January 18, 2016

Foundation Home Loans has criticised lenders planning to slap professional landlords investing through limited companies with a higher interest rate on buy-to-let mortgages.

The lender’s commercial director Simon Bayley warned that he is aware of several lenders charging up to 100bps extra for limited company buy-to-let deals over their core range, when he claims “the risk is no different”.

He said: “Certain lenders are 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.”

Most mainstream and larger specialist buy-to-let lenders have already committed to pricing across buy-to-let product types without discriminating between landlords investing inside or outwith limited companies.

Bayley added: “As soon as brokers realise that there are lenders whic 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.”


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