Bad Credit Buy to Let Mortgages
The Buy To Let mortgage market has changed dramatically in 2019 due to the changes made by HMRC in how the tax position will change in 2020. With this in mind we are seeing most clients now using an SPV to purchase an investment property, and all clients would be advised to discuss their personal position with their accountant or a suitably qualified Tax Advisor to make sure what would be the best course of action for them to take.
In the current market we would normally expect to achieve 75% LTV but the opportunity to raise this to 85% LTV is there subject to the credit profile, the experience of the client and the rental income.
Some of the lenders are becoming more flexible in this market and we are now able to consider;
1 HMO property
3 Holiday let
4 Student let
It is always helpful to view your credit file as soon as possible which will allow us to place your application accurately on the best terms that your credit profile will allow. You can obtain your credit file for a one off payment of £2 by a debit card or take a one month free trial from;
More About Bad Credit Buy to Let
On a very positive note we now have far more lenders who will accept a degree of historical bad or adverse credit in this very competitive market. We would recommend that you obtain a copy of your credit file in order that we may view your credit profile which will allow us to place your bad credit mortgage on the most competitive terms. Not all lenders make their decision based on your credit score, as some of the specialist lenders use a more common-sense manual underwrite. With this in mind, we would still expect in most cases to achieve 75% LTV subject to credit profile and passing the rental stress test.
With the change in the rules brought in by HMRC most clients are advised to consider purchasing via a Limited Company (SPV) but this will not have any impact on the terms or how lenders view your credit profile.
If you are an experienced Landlord we will need to see full details of your portfolio, as some lenders stress the rental income on the whole portfolio, and fortunately some others will only stress the rental income on the property in question. The more information that you provide up front would mean that your mortgage illustration is based on fact, with no assumptions and will be accurate.
We are very experienced in placing unusual and difficult cases, and will do all we can to help you as quickly as possible to get the right and positive response.
Call us now for more information on
Land line 03452 605506 Mobile 07867 794837
HMRC Tax Rules – Renting out a property & running a property business
More useful information on renting out property (England and Wales)
Please note the information below is a snippet taken from
Running a property business
You have to pay Class 2 National Insurance if your profits are over £5,965 a year and what you do counts as running a business, for example if all the following apply:
- being a landlord is your main job
- you rent out more than one property
- you’re buying new properties to rent out
If your profits are under £5,965, you can make voluntary Class 2 National Insurance payments, for example to make sure you get the full State Pension.
You do not pay National Insurance if you’re not running a business – even if you do work like arranging repairs, advertising for tenants and arranging tenancy agreements.
Property you personally own
The first £1,000 of your income from property rental is tax-free. This is your ‘property allowance’.
Contact HMRC if your income from property rental is between £1,000 and £2,500 a year.
You must report it on a Self Assessment tax return if it’s:
- £2,500 to £9,999 after allowable expenses
- £10,000 or more before allowable expenses
If you do not usually send a tax return, you need to register by 5 October following the tax year you had rental income.
Mansion Park Limited is a credit broker not a lender.