Posts Tagged 'Limited Company BTL'

Buy-to-Let: Factors to Consider for a Smart Investment

Here are some issues that lenders may not like when it comes to buy to let properties as well as other factors to consider when making a purchase:

  • Structural problems: Look out for any signs of structural damage or issues with the building’s foundation. This can include cracks in walls or floors, sagging roofs, and uneven floors. These problems can be expensive to fix, and lenders may be hesitant to approve a mortgage on a property with structural issues.
  • Damp: Damp can cause a lot of problems for a property, including damage to the building’s structure and potential health hazards for tenants. Check for any signs of damp, such as musty smells, damp patches on walls or ceilings, or peeling wallpaper.
  • Electrical and gas safety: Ensure that the property has up-to-date gas and electrical safety certificates. These documents are required by law and ensure that the property’s gas and electrical systems are safe for tenants to use.
  • Fire safety: Look for smoke alarms and carbon monoxide detectors in the property. These are required by law and help ensure that tenants are safe in the event of a fire or gas leak.
  • Japanese Knotweed: This invasive plant can cause significant damage to a property’s structure and can be expensive to remove. Take a ladder with you and look over any garden walls.
  • Planning permission and building regulations: If the property has been extended or altered in any way, ensure that the appropriate planning permission and building regulations were obtained.
  • Leasehold issues: If the property is leasehold, ensure that the lease is long enough to meet lender requirements which is usually 85 years, the ground rent is not over £250 pa and the service charge is no more than 0.1% of the purchase price. Also, check for how the ground rent can be increased, any arrears and the freeholder is contactable.
  • Ex-council properties: Properties that were formerly owned by the council may come with some limitations or issues if their is still a high proportion of council properties in the area with limited owner occupier demand.

Other factors to consider:

  • Electricity pylons and substations: These can have a negative impact on the value of a property, as well as potentially affecting the health of tenants.
  • Noisy or smelly shops and offices: Properties located near noisy or smelly commercial premises, such as bars, restaurants, or factories, can impact the quality of life for tenants and potentially impact the property’s value.
  • Railway lines: Properties located near railway lines may experience noise pollution and vibrations, which can be a nuisance for tenants. Additionally, properties located near railway stations may experience higher foot traffic and potential security concerns.
  • Flood risk: Properties located in areas with a history of flooding may be at higher risk of damage, which can impact the property’s value and insurability.
  • Radon gas: Some areas of the UK are known to have higher levels of radon gas, which can pose a health risk for tenants.
  • Rental yield: The rental yield is the annual rental income expressed as a percentage of the property’s value. A high rental yield compared to other properties in the area may indicate that there are issues with the property, such as high maintenance costs or an undesirable location. It’s important to balance rental yield with other factors, such as location, property condition, mortgage rate and tenant demand, when making a purchase decision.
  • Energy performance certificates (EPCs): An EPC rates a property’s energy efficiency on a scale of A to G, with A being the most efficient. From 2025 or 2028, it may be a legal requirement for all rental properties to have a minimum EPC rating of C in order to be let out. It’s important to ensure that the property has an up-to-date EPC and that the rating can meet the minimum requirement, as failure to do so can result in fines and legal penalties. Improving the energy efficiency of a property can also help reduce energy bills for tenants and increase its appeal to prospective renters.

When considering a buy-to-let property, it’s important to thoroughly research any potential issues or limitations of the property before making a purchase. Working with a professional property valuer or surveyor will help.

Looking to invest in a buy-to-let property? Let Searchlight Finance help you secure your buy-to-let mortgage for your investment. Contact us today for a free consultation and expert guidance on your property investment journey.

Multi-Unit Freehold Blocks for Property Investors

Multi-unit freehold blocks are becoming increasingly popular among property investors. This article aims to provide an understanding of what these blocks are. Their advantages and disadvantages and essential considerations when investing in them.

By understanding the ins and outs you can make well-informed decisions to maximise your property investment and development opportunities.


A multi-unit freehold block (MUFB) is a single building that consist of multiple self contained individual units all owned by a single freeholder. The freeholder owns the whole building and is responsible for the maintenance and management of each unit and the common areas.

Lenders look at the size of each unit and if each unit has their own utilities. Criteria does vary considerably from lender to lender.


  • Diversification: Investing in MUFBs allows investors and developers to diversify their property portfolios, spreading risk across multiple units and tenants.
  • Economies of scale: Managing and maintaining multiple units within a single block can be more cost-effective due to shared costs and resources.
  • Attractive rental yields: MUFBs usually often offer higher rental yields compared to single-unit investments, making them more lucrative for investors.
  • Capital growth: Well-located and well-managed MUFBs may experience strong capital growth over time, providing long-term value appreciation but there is no guarantee.
  • Reduced void periods: With multiple units in one building, the chances of all units being vacant simultaneously are lower, providing more consistent rental income.


Management complexity: Managing a MUFB can be more complex than managing single-unit properties, requiring expertise in tenant relations, legal compliance, and building maintenance.

  • Illiquidity: Selling a MUFB may be more challenging due to a reduced pool of potential buyers, making it a less liquid investment compared to single-unit properties.
  • Concentration risk: Although MUFBs offer diversification within the block, investors may face concentration risk if their entire portfolio consists of MUFBs in a single location.
  • Financing challenges: Obtaining financing for a MUFB can be more difficult than for single-unit properties, as lenders often have more stringent lending criteria for multi-unit investments.
  • Legal and regulatory challenges: Developers and investors must navigate complex legal and regulatory requirements when converting or developing MUFBs, which may require specialist advice and support.

In conclusion, investing in multi-unit freehold blocks can be an attractive option for property investors and developers.

It is essential to weigh the advantages and disadvantages, conduct thorough due diligence, and seek professional advice before making any investment decisions.

By understanding the complexities of MUFBs, you can take advantage of the potential rewards they offer while mitigating the associated risks.

Don’t miss out on the opportunity to maximise your property portfolio’s potential.

Contact us today to schedule a free, no-obligation consultation and discover how we can help you unlock the full potential of multi-unit freehold blocks.

Top 5 Tips for the Right Buy-to-Let Mortgage

Securing the right buy-to-let mortgage is a critical step in building a successful property portfolio.

In this article, we’ll discuss the top 5 tips for choosing the right buy-to-let mortgage to help you make an informed decision.

Know your borrowing options

Before diving into mortgage deals, familiarise yourself with the different types of buy-to-let mortgages available, including fixed-rate, variable-rate and tracker mortgages.

Each type has its pros and cons, so understanding your options will help you select a mortgage that aligns with your investment goals and risk tolerance.

Compare mortgage deals

Don’t settle for the first mortgage offer you come across. Instead, compare deals from multiple lenders, taking into account interest rates, loan terms, and repayment structures.

Working with a mortgage broker can help you find the best deal for your circumstances as not all products are available directly with a lender.

Consider your investment strategy

Your buy-to-let mortgage should align with your overall investment strategy. Are you focused on long-term capital growth, or do you prioritise high rental yields?

Depending on your goals, you may opt for an interest-only mortgage to maximise cash flow or a repayment mortgage to build equity over time.

Assess mortgage fees and charges

When comparing mortgage deals, be sure to factor in additional fees and charges. These include arrangement fees, broker fees, valuation fees, and early repayment charges.

These costs can impact the overall cost of your mortgage, so it’s essential to account for them when evaluating potential deals.

Plan for future market changes

While it’s impossible to predict the future, it’s crucial to consider how future market changes may impact your buy-to-let mortgage.

For instance, rising interest rates could increase your monthly repayments if you have a variable-rate mortgage.

Ensure you have a contingency plan in place to manage potential risks and safeguard your investments.

By following these tips, you can secure a mortgage that supports your goals and contributes to the long-term success of your property portfolio.

Don’t leave your buy-to-let mortgage decision to chance.

Reach out today for personalised advice and support in finding the perfect BTL mortgage for your property investment needs.

Contact us now to get started on the path to success in the buy-to-let market.

Another 80% LTV product for Buy to Let Landlords

It’s good to the see one of our lenders return to 80% LTV on single lets. They have two and five year fixed products for BTL mortgages which come either with a free or discounted valuation.

Available for personal and limited company ownership. Portfolio landlords welcome.

Tenants working, students and DSS on AST. Corporate Lets and Local Authority & Housing Association Lets (prior approval required).

They also finance HMOs and multi unit blocks and products available at both 65% and 75% LTV.

To find out more about this product and our services please contact us.

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ILA – The Hidden Costs of a Guarantee

When taking out a BTL mortgage 99% of lenders require the directors and possibly shareholders to personally guarantee the mortgage.

This guarantee needs witnessing from a solicitor who must explain the legal implications of the document. This is called Independent Legal Advice (ILA).

A lot of brokers do not mention this process so when it comes to signing in front of a solicitor there can be a big surprise. We have seen some fees as high as £800 to witness one document!

There can be a choice though as lenders fall into these categories:

  • ILA always required
  • ILA can be dispensed with under certain circumstances. Usually when the guarantors are the same as the directors
  • The guarantee can be witnessed by anybody over the age of 18 who is not related to you or on the same loan
  • No Guarantee required

As we move down the list the cost to witness the guarantee reduces to zero and the process is much quicker.

Make sure you are fully aware of the options and costs as there can be significant savings with the right lender.

We always discuss this as part of the legal process. If you require help getting your next Limited Company BTL mortgage please contact us.

Product Choice

You may think it’s comparing one rate with another and that’s it, but there are so many other factors to consider when choosing a BTL mortgage. The more of these you want, the less choice you will have.

-Overall Cost. Look at all the costs including lender set up fee, interest over the term, interest on the fee if added to the loan, valuation and solicitors costs less any cashback. You will be surprised how many brokers just look at the lowest monthly payment, which may not be the best option.

-Service. Who would you rather use, a lender that takes one day to look at your application and documentation or three weeks? A great rate is not so great if you lose your purchase.

-Product Transfers, Further Advances, Repaying extra 10% per year, Free Valuations and Free Legals when you remortgage.

These are all very common when you own property personally but in the limited company market they are rare.

The ability to keep your mortgage with your existing lender can be crucial if market conditions change or to keep the remortgage costs down.

If any of these are vital then the best rate may not be the best product for you.

Talk to us to see how we can find a BTL mortgage to match your requirements.

Portfolio Landlords – BTL Remortgage

As a professional landlord it’s not just about the rate when choosing a BTL remortgage, it’s also speed if you are approaching your current lender’s variable rate. If you have a quick lender and competitive rates you are on your way to a speedy completion for your Buy to Let Remortgage.

These are some of things a lender can do to speed the process up:

  • Title Insurance
  • Electronic Signatures on Application Forms
  • Open Banking
  • Relaxed view on Independent Legal Advice

Ideally the lender should also offer the following:

  • Product Transfers
  • Extensive solicitor panel
  • Ability to repay extra each year

When comparing mortgages always add up all the costs including interest, all lender fees, legal costs and providing Independent Legal Advice for the personal guarantee.

Also look at the information they need and how long will it take you to prepare. The list includes:

  • Portfolio – will it meet the lenders LTV threshold, with most it’s 75% although some are less and others more
  • Rental Calculation across portfolio
  • Business Plan – doesn’t take long and lenders have their own format
  • Cash flow – the longest to do but not many lenders ask for it
  • Bank Statements confirming income on the portfolio
  • Tax Year Calculations, SA100 and Tax Year Overviews for at least two years
  • Limited Company Accounts for at least two years
  • EPC – are they all E or better. If F or G a lender may ignore the income but still include the debt

We’ve been doing this type of mortgage for many years so please contact us if you need help on your next BTL remortgage.

Remortgage of BTL Portfolio in Lancashire

£330,000 refinance from a bank that says No!

Due to the age of the applicants, their existing lender had given notice to a long-established Lancashire property company to move it’s property portfolio to another bank or sell.

The directors were in their 80’s and spent most of their time overseas and didn’t own a main residence in this country. To add to this, their tenants received housing benefit which some of the banks didn’t like.

We kept in constant contact with the outgoing lender and updated them at every stage. This gave the bank the confidence to grant extra time in a complicated restructure.

Never to back away from a challenge, we arranged with the directors for a UK based relative to become a director. This gave a new bank comfort in succession planning and where other brokers had failed we obtained the finance needed. The properties have been retained giving the clients a comfortable income in their well-earned retirement.

Case Study for New Build Flats

A Cheshire based company had built four apartments with total land and build cost of £200,000 and the properties were valued at £440,000.

Lenders had been approached by our clients and all were either not interested as they were property developers, or wanted them to leave some of their money in the project so they only had had access to a maximum loan of £180,000. This was seriously going to affect their future projects and expansion plans.

By getting to know their medium and long-term strategy we presented this to a specialist property lender. By outlining their plans the lender was satisfied that the company had a long-term viable plan which they wanted to support and offered 75% of the value to them. So we have two happy directors who now have an extra £150,000 to go towards their next project.

Searchlight Finance Ltd is a broker not a lender.

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We are a credit broker not a lender.

Searchlight Finance Ltd is registered at 98, King Street, Knutsford, Cheshire, WA16 6HQ. Company Register number is 07929050.

Authorised and Regulated by the Financial Conduct Authority. Our FCA registration number is 743220. You can check via www.register.fca.org.

We are registered with the Information Commissioner’s Office, Z3109319 and you can check via www.ico.org.uk.

We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority.

We source finance from the whole of market and may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature of any commission model will be confirmed to you before you proceed.

Member of National Association of Commercial Finance Brokers (NACFB).