Limited Company Buy to Let mortgages - get a map before entering the woods!
Everyone is asking about whether or not you should wrap your new BTL purchase in a limited company wrapper and avoid the tax changes that are begining to bite for the higher rate tax payers who hold their portfolio in their individual names. It is not a simple answer! It depends on so many factors including earning capacity, what you are going to do with the property and how much rental income you are receiving at the moment.
The most important though is your future plans. Without a plan in place it is very difficult to advise any client and if you are contemplating returning to the BTL market or dipping your toe for the first time, my advice would be to get a blank piece of paper and work out what it is that you want out of this.
Your answers could be:-
Sole source of income
Want to give up the day job to concentrate wjolly on property
Supplement the pension
Provide a pension
Buy something for the kids/grandchildren
Leave the kids an inheritance
Once you have this then go and speak to your accountant or better still go and speak to an accountant who specialises in helping the BTL investor - if you need recommendation then just drop me an e mail.
Once you have done that then it's time to look at mortgages. The BTL space for limited company mortgages is slowly but surely begining to gain some traction and recently Kensington Mortgages and The Mortgage Lender have decided the time is now right to enter the market. They have beaten Nationwide Building Society's BTL lending arm The Mortgage Works to the market as TMW still continue to be unable to state when they will finish their pilot and offer limited company BTLs to the whole of the market. July was meant to be the launch date but still no catagoric word from them.
So in summary, the market is good at the moment with more and more choice for the limited company BTL and once TMW open themselves up then I am sure that there will be other lenders out there who will follow suit. But for goodness sake make sure you have a map before you enter the woods!