All too often landlords have to pay a higher rate for adding to their portfolio if they purchase through a limited company, rather than as an individual, as a result of the higher interest rates levied on limited company buy-to-let products.

That isn’t necessarily fair – purchasing through an SPV is a perfectly legitimate way to invest in property and does not have to involve the lender taking on any additional risks which could justify that higher rate.

It’s an issue that we have addressed with the recent repricing of our buy-to-let range, bringing the rates on limited company borrowing with a personal guarantee in line with standard buy-to-let products. It means that, irrespective of how they are structuring their portfolio, landlords can face the same cost when borrowing from The Mansfield.

The reality is that limited company borrowing is only likely to become more common in the years ahead, and discriminating against some borrowers based on their investing structure is not appropriate. It’s an area of the market calling out for competition and innovation, which ultimately can only benefit brokers and their clients.

Our new products, available up to 75% LTV, offer a two or three-year term on an initial fixed or discounted rate and include a three-year discount at 2.29% variable that has been rated as “Outstanding” by independent industry experts Moneyfacts.

Do I need a guarantee?

Another area where limited company borrowers are often treated differently is with personal guarantees. It’s common for lenders to require borrowers to put a personal guarantee in place to provide additional security for the loan.

Yet there will be occasions when providing that sort of guarantee simply isn’t an option for the borrower. Is that really a good enough reason to prevent them from accessing the funds they need for their investments? Should the absence of a personal guarantee really be a deal breaker if the borrower is otherwise a perfect prospect?

At Mansfield we take a different view, offering a limited company buy-to-let product without the requirement for a personal guarantee.

While borrowing in this way may incur a slightly higher rate than would be the case with a guarantee provided, it shows that the perceived complexity (that may otherwise scupper a case if placed elsewhere) does not have to be an insurmountable challenge for lenders who focus on flexibility and a personal approach.

A more detail-based, flexible approach is required. It’s at the heart of how we operate at Mansfield, and I have no doubt that in the years ahead lenders who embrace that way of assessing borrowers will stand out from the crowd and win the long-standing backing of brokers across the market.

A common sense approach

If you’ve got a case on your desk that requires a common sense approach to lending then please pick up the phone to our Broker Support team on 01623 676360