Moving back in to BTL purchased under company

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    Moving back in to BTL purchased under company

    Hello everyone,

    If a house is purchased under a company with BTL mortgage, is it possible later on to switch to residential mortgage so that the company director can stop letting it out and use it as main residence? Does residential mortgages for companies exist? Will it have an exorbitant rate and only a handful of providers? Any other pitfalls of trying to do this?

    many thanks in advance

    #2
    Do you mean "is it technically possible" or "are there products/providers out there to enabe it"?

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      #3
      Hi MdeB,
      Now that you ask, I would like the answer to both please...

      cheers

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        #4
        I am not aware of any "residential" mortgage available for a company.
        The differences in risk profile would make them extremely difficult to offer.

        You'd take out a personal mortgage and buy the property from the company.

        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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          #5
          The best thing is to contact the company who you currently have the mortgage with to see what other products are available. If you keep the property in the company name then you would need to pay the market rate for rent to satisfy HMRC. Alternatively you would need to sell the property from the company to your own name which may have stamp duty tax implications as well as CGT.

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            #6
            If the property is owned by a company, any increase in value would be income to the company, rather than a capital gain.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              Hi jpkeates and ash72,
              Thanks for sharing your knowledge with me.

              In this case, intention is not to dodge Tax, or to sell the property. The intention is to use it as a residence again.
              But it appears to me that this is not so simple at all.



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                #8
                Lending to a Limited Company is classified as a Corporate borrowing and is a Non Regulated Loan. The Company has declared that it will be let on an AST. For the property to be occupied as a primary residence makes it a regulated mortgage and to my knowledge I know of no lender in this sector that would accommodate such a request , they probably would suggest as has already been mentioned that you buy the property from the company which in itself would incur Stamp Duty and possible the 3% premium if you have interests in one or more properties , such borrowings could be offered by the lender or another lending source if the terms were more advantageous but would of course then be subject to the lenders Affordability assessment using your primary income but exclude rental income if the properties were subject to mortgage.
                Tohelp I have spoken to two leading lenders who grant BtL via Ltd Co’s and their response was a categoric No.

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                  #9
                  Residential mortgages are for "owner occupiers". A company is not "occupier" like a person occupies a residential property,

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                    #10
                    Hi loanarranger, Gordon999 ,
                    thanks for your response.
                    I think I have got the message now. This is not a good idea

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