1. 300 North Road, Cardiff, CF143BN
300 North Road, Cardiff, CF143BN. Kevin Rodgers - Tel: – What’s changing for landlords?
Aggressive new taxes have recently targeted buy-to-let properties
higher rates of stamp duty and
the removal of tax relief on mortgage interest. 

2. As a result
You have already seen lenders change their Interest Coverage Ratio (ICR) and stress rate requirements, Meaning landlords with lower rental yields may find it more challenging to refinance or purchase new BTL property. In addition Lenders are expected to adopt specialist underwriting approaches for landlords with four or more mortgaged BTL properties, defined as portfolio landlords

3. BTL Tax Change The fundamental calculation has changed
Maximum tax relief limited to 20%
Some landlords will see an increase in tax liability
Lenders have to consider new tax rules in calculation •

5. PRA Statement Portfolio Landlords Stress rates
4 or more mortgaged properties
Different underwriting treatment
Consider whole portfolio
Who will remain in this market?
Stress rates
All lenders must use 5.5% to stress BTL
5 year fixed can use lower rate
Need to consider any increased tax liability

6. There are still opportunities
Customers need advice
Yes BTL is getting harder
Some customers may need LTD co
Serious landlords are still buying
Thousands need re-mortgaging
Understand the rules
Understand the customer
Guide not advise
BTL is here to stay

9. Limited company registered in England or Wales
LIMITED COMPANY TYPES
Limited company registered in England or Wales
SIC codes
Buying and selling of own real estate
Other letting and operating of own or leased rental estate
Management of real estate on a fee or contract basis

10. The emergence of BTL Ltd Company Lending
Driven by two events:
For landlords:
8th July 2015:
announcement to progressively restrict tax relief on mortgage interest and other finance costs to the basic rate of tax (20%)
For lenders:
28thSeptember 2016:
PRA announces SS13/16 and PS 28/16 for Underwriting standards for buy-to-let mortgage contracts
•Change of stress tests on or before 2ndJanuary 2017
•Implementation of new underwriting for portfolio landlords

11. Pros and Cons of a Ltd Company
Corporation Tax NOT Income Tax - now 20% reducing to 17% in April ‘20
Interest relief remains a fully allowable expense
Ltd Companies not subject to the new ICR/stress test changes so landlords will be able to borrow more
Lots of product choice (240+ products available) & same rates as for personal borrowers offered by most lenders
Cons
Exit strategies may be more expensive than CGT

12. What changes have we seen recently?
Policy developments
Minimum affordability standards
Specialist underwriting for portfolio landlords
Landlord strategies
Rent increases
Maximising attractiveness of your property
Houses in multiple occupation (HMOs)
Limited company structures
Criteria highlights
Let to buy

13. Questions?

14. MARKET OVERVIEW
The number of buy-to-let mortgages has grown from 835,900 mortgages outstanding with a total balance of £93.2 billion at the end of 2006, to nearly 1.9 million mortgages at the end of 2016, with an aggregate balance of £229 billion*
Renters are on the rise, with analysis from PwC suggesting that by 2025, 7.2m households will be in rented accommodation, compared with 5.4m in 2015 and 2.3m in 2001