how many buy to let mortgages can I have?

February 8, 2024

217
The number of buy-to-let mortgages you can have is not universally capped but depends on the lender’s criteria and your financial circumstances. Some lenders may limit the number of mortgages or total borrowing amount they’re willing to offer to an individual, while others may assess each application on its own merits. It’s common for landlords to have multiple buy-to-let mortgages, especially if they can demonstrate the financial stability and rental income to support additional loans.

Lender’s Criteria

Lending Limits

Some lenders may have their own limits on the number of mortgages or the total amount they’re willing to lend to one individual or within a portfolio.

Portfolio Landlord Policies

If you have four or more mortgaged buy-to-let properties, you are considered a “portfolio landlord” under the Prudential Regulation Authority (PRA) guidelines. Lenders may apply stricter criteria when assessing mortgage applications from portfolio landlords, including stress tests across your entire portfolio.

Financial Situation

Affordability:

Each mortgage application will be subject to an affordability assessment, taking into account your rental income, personal income, and any other financial commitments. Your ability to pass these assessments will influence how many mortgages you can hold.

Equity and Deposit:

The amount of equity you have in your existing properties and the cash you have available for deposits will also impact your ability to secure additional mortgages.

Experience as a Landlord

Proven Track Record:

Lenders often look more favourably on experienced landlords with a history of managing rental properties successfully, potentially allowing them to secure more mortgages.

Regulatory and Tax Considerations

Tax Implications:

Owning multiple buy to let properties can have significant tax implications, including income tax on rental income and capital gains tax on the sale of properties. The introduction of the Section 24 mortgage interest relief changes has also affected the profitability and tax efficiency of owning multiple buy to let properties.

Stamp Duty Land Tax (SDLT):

Additional properties attract a higher rate of SDLT, which can affect the cost of expanding your portfolio.

Advice

Given these considerations, the practical limit to the number of buy-to-let mortgages you can have is largely determined by your personal circumstances and the lending criteria of the institutions you’re approaching. It’s advisable to:

Consult with Ascot Mortgages:

A broker experienced in buy-to-let mortgages can provide advice tailored to your situation, help you navigate the varying criteria of different lenders, and find the best deals for expanding your portfolio.

Financial Planning:

Ensure you have a clear financial plan for managing multiple rental properties, including provisions for vacancies, maintenance, and potential interest rate rises. In summary, while there’s no statutory limit on the number of buy-to-let mortgages you can hold, practical limits are set by lenders’ policies, regulatory guidelines, and your financial circumstances. Consulting with a professional can help you understand how to navigate these factors effectively.

Answered by:

Natalia Barry

Mortgage and Protection Adviser

Last Updated:

18.06.2024

Answered by:

Natalia Barry

Mortgage and Protection Adviser

Last Updated:

18.06.2024

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