Vida Homeloans has expanded its buy-to-let lending criteria to support a wider range of Special Purpose Vehicle structures, including subsidiary companies owned by parent businesses.
The lender said the changes are designed to provide greater flexibility for brokers dealing with increasingly complex landlord structures and reflect evolving trends within the buy-to-let market.
Under the revised criteria, Vida will now accept buy-to-let SPVs where the borrowing company is a subsidiary of a parent company, a structure it says is becoming more common among landlords managing larger property portfolios.
The updated policy permits a maximum of two company layers, comprising the SPV and its parent company. The directors of the SPV must match those of the parent company and those directors must collectively hold at least 75% of the shares in the parent company.
In addition, all directors and shareholders of the SPV must be named on the mortgage application.
Vida said the changes would allow it to support a broader range of landlords whose applications may previously have fallen outside its lending criteria because of more complex corporate arrangements.
While SPV structures are available to both amateur and professional landlords, the lender noted that subsidiary arrangements are typically more common among experienced investors with larger portfolios.
Dave Angel, managing director, mortgage product management at Vida Homeloans, said: “The buy-to-let market continues to evolve, and we know that for various operational and financial reasons, many landlords choose to structure their property business as a subsidiary of a parent company.
“We’ve listened to feedback from our intermediary partners and acknowledge our previous policy didn’t support customers with these more complex arrangements; buy-to-let is a key part of our proposition, so I’m pleased we’ve been able to make this positive change that reflects the reality of how many landlords operate.”
Vida said the enhancement forms part of its ongoing efforts to adapt its buy-to-let proposition to changing landlord requirements and provide brokers with more options when placing complex cases.
