BM Solutions (Lloyds) has launched an LTD Company BTL Mortgage proposition, demonstrating confidence with its entry with competitive pricing.

The lender's criteria are good but conventional, primarily competing with TMW (Nationwide), Kensington (Barclays), Leeds Building Society, and Godiva. It does not cater to more specialised areas of BTL, such as Multi-Tenancy HMOs, MUFBs, Group Shareholding, First-Time Landlords, and similar categories.

The step into the market, while confident, is limited to 75% LTV, whereas others mentioned go up to 80% LTV, and two lenders are now offering 85% LTV.

It is a welcome step to add competition to the market. As we wrote last year, the UK's Largest Lenders Are Avoiding Buy-to-Let Mortgages for Limited Companies. This is BM Solutions, which held the largest BTL Market Share in 2022, entering the LTD Company BTL Market.

To compare rates today, 75% LTV 5-year fixed rate with £0 arrangement fee starts at:

• 5.27% for The Mortgage Works.
• 5.29% for BM Solutions.
• 5.29% for Kensington.
• 5.34% for Leeds BS.
• 5.40% for Godiva.
• 5.45% for Paragon.

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A slight tangent but an opportunity to highlight the price premium. For a like-for-like product, BM Solution charges 5.29% through an LTD company and 4.39% in a personal name. Nearly a whole percentage point difference, on a £100,000 loan, equating to £75 more per month on an interest-only basis.

Company & Shareholders

• The company must be an SPV (no trading companies, or layered ownership).
• Up to 4 parties in the company (directors & shareholders)
• The minimum director or shareholder age is 21, and the maximum age is 75 years at application.
• All directors & shareholders must be guarantors.
• Floating charges or debentures can not be in place over the company.
• If there is limited experience of managing BTL property the application will be referred for an underwriter assessment.

Rental Stress Tests & Minimum Income

A 125% Rental Stress Test Cover Ratio is applied to Limited Company Buy-to-Let properties.

Higher-rate taxpayers were previously required to undergo a 145% stress test due to regulations, but now they can proceed through an LTD Company to achieve a lower stress test.

Top Slicing, a practice of using personal income to pass rental stress tests, is not available from BM Solutions.

BM Solutions has "No Minimum Income". However, BM Solutions expects that the directors and shareholders can afford their personal commitments, thereby ensuring that our lending decision is sustainable if the tenant stops paying or the property requires any maintenance or repairs. Plus, if you are self-employed, BM will need at least two years' worth of trading figures.

First Time Buyers, First Time Landlords and Consumer Buy-to-Let

First Time Buyers (FTB) are not permitted, with BM requiring at least one director or shareholder owning a property in the UK in their own name.

First Time Landlords (FTL) are not permitted, with BM Solutions requiring some renting experience at the underwriters' discretion.

BM Solutions does not offer Limited company consumer buy-to-let (CBTL). Consumer buy-to-let (CBTL) refers to individuals who unintentionally become landlords, often by renting out a property they once lived in. However, this is rare as those properties are often owned in personal name, not an LTD Company.

Limited company BTL properties cannot be let to a family member.

HMOs, MUFBs & Subletting

BM Solutions allows Standard Tenancies Only.

This means no Rent-to-Rent (subletting), such as via social housing providers, housing associations, or councils.

No Multi-Unit Freehold Blocks (MUFBS), No Holiday Lets, etc..

HMOs with BM Solutions are permissible, but it is restrictive. In that the property must be suitable for standard residential occupation AND only permissible if all occupants are on one tenancy. Whilst they do permit up to 5 occupants, they cannot have individual HMO tenancies, and the property cannot look like a standard HMO.

MISC:

• A minimum loan amount of £25,001, a minimum value of £50,000 and a maximum loan of £1,000,000 at 75% LTV.
• Intercompany loans are not acceptable, but Director Loans are, as are (non-repayable) Gifted Deposits from close family members. BM won't accept concessionary purchase applications where the property is being purchased below full market value.
• Properties in England, Northern Ireland, Scotland, and Wales must have a valid EPC rating of E or above.
• The property must be habitable, readily lettable or saleable, and structurally sound.
• No Expats.
• 6 Month Rule (remortgage) No remortgaging within six months of ownership.
• 6 Month Rule (purchase) The current vendor must have owned the property for at least six months before we can accept an application to purchase the property.
• Leasehold properties must have a minimum of 70 years left on the lease at application.
• England, Scotland & Wales. Excludes Northern Ireland.
• A new LTD company can be established, but it must be set up before the application and have a bank account.

Lowest Limited Company BTL Mortgage Rates

As seen on:

• The Intermediary
• Mortgage Solutions

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