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What is a portfolio landlord?


What is a portfolio landlord?

It’s a term that crops up fairly regularly in the lettings industry, but you may wonder exactly what meant by the term ‘portfolio landlord’.

Definition of ‘portfolio landlord’

According to those who lend money to landlords for the purpose of purchasing buy-to-let property, such as mortgage brokers and providers, a ‘portfolio landlord’ is one who has four or more separate mortgaged properties in the UK, that have been bought specifically as buy-to-let investments.

Sole borrowers

Sole borrowers are straightforward, as when they own four or more buy-to-let properties, they become portfolio landlords.

Joint borrowers

If two or more people share legal ownership of a property, then each person is counted separately and their total number of properties is added up to decide if they are ‘portfolio’. For example, if two people apply for a joint mortgage on a buy-to-let property, one of whom solely owns two properties and the other just owns one, this new property will be classed as their fourth. Therefore, they would be considered a portfolio landlord.

Which properties count?

When adding up the properties an individual has a share in, holiday lets, ‘consent to let’ properties and those owned via a limited company all count, as well as those owned solely or jointly through buy-to-let mortgages. Any properties located abroad are usually excluded.

What else might I need to know?

No more than 10 buy-to-let mortgages, secured via any lender(s), is generally permitted per household.

A larger deposit is required for a buy-to-let mortgage than that required by owner occupiers. This can be between 20-40%, depending on lender, with most requiring at least a 25% deposit.

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