Based on a real case. Names, figures, dates and some details have been changed so the client cannot be identified, but the way the numbers behave is accurate. Lender criteria change often, so this shows how the assessment worked at the time, not what any lender will offer now.

Who

Two directors buying through a property company they had set up the year before. Between them they ran two other trading businesses.

The property

A modern one-bed flat in Southampton, leasehold with over 100 years left, ground rent under £300 a year, service charge around £1,900 a year, EPC B, bought for £112,000 against an asking price of £118,000

The snag

The company owned two flats already but had paid cash for both and neither was let yet, so every lender treated the directors as first-time landlords. The deposit had come partly from personal savings and partly from their other companies.

The outcome

Placed with a specialist lender that accepts first-time landlords in a limited company, does not require the directors to own their own home, and was happy with directors' loans and intercompany transfers as the source of deposit. Offer issued and the purchase completed.

How the enquiry arrived

The email came in on a Saturday morning. The two directors already had a broker, recommended by the agent on a previous purchase, but that firm had been slow and they wanted someone who would actually move. The email ran to ten numbered questions: which lenders, what rate, product fees, valuation fees, the rental calculation, early repayment charges, timescales, and whether 75% or 70% loan to value made more sense.

I did not answer any of them that day. Firing rates at someone I have not fact-found is guesswork, and the rates would have moved by the time they decided anyway. What I sent back instead was the six things a lender would actually want to know about the flat and the company, and one condition: I do not run alongside another broker. Two applications on the same property is bad for the client and lenders do not like it. They confirmed nothing had been signed or submitted elsewhere, and answered all six questions the same day. This case study is part of my buy to let mortgage hub.

The flat was fine. The company was the question

On paper the property was as clean as a buy to let flat gets. Long lease, flat ground rent with no escalation clause, a reserve fund in the block, no major works planned, a modern building, and a long-term let to a professional couple. The rent covered the borrowing comfortably at either loan to value.

The interesting part was what the directors told me about the company. It had bought two flats already, both for cash. One was being let for the first time that week. The other had not completed yet. So the directors thought of themselves as portfolio landlords building a business, which is fair, but a lender looks at rental history and there was none. That makes them first-time landlords in the eyes of most limited company buy to let lenders, and a lot of those lenders want twelve months of letting experience before they will look at a company.

Then the deposit. Part of it was personal savings, which is easy. The rest had come into the property company from the two other businesses the directors owned, sitting in the accounts as directors' loans. Every lender's money laundering checks will want to see where that money started, not just that it is now in the right account. Some lenders will not accept intercompany transfers as deposit at all. Others want an accountant's letter confirming the transfers were legitimate and the other businesses are still solvent after making them.

What I asked for

The questions I put to the directors were the ones the underwriter would have asked in week two, so I would rather have the answers before the application went in. What the payment to a firm of solicitors on the personal statements was (conveyancing on the earlier flats, as it turned out). Which account the rent from the existing properties would land in. The names and Companies House numbers of the other two businesses, their bank statements for the months the transfers went out, and how the money had been treated in the property company's books.

None of that was a problem. It was simply a case of having the paper trail assembled before anyone asked for it, rather than scrambling for it afterwards.

The lender

The case needed a lender that would take all three things at once: a limited company with no letting history, directors who were not required to own their own home, and a deposit built from directors' loans and intercompany transfers with a clear trail. That rules out the high street entirely and a fair chunk of the specialist market too. The lender I placed it with does all three as standard, so there was no need to ask for an exception or argue the case.

On the rental calculation, the lender needed the rent to cover the mortgage interest with a margin on top, tested at a rate above the one the client would actually pay. On £84,000 of borrowing the rent needed to be roughly £480 a month to pass. The flat let for £875, so there was room to spare, and that room is what made the 75% option workable rather than having to drop to 70% and tie up another £5,600 of the company's cash.

The directors saw a growing portfolio. The lender saw a company with no rent coming in. Knowing which lenders do not mind that is the whole job.

Timing

From receiving the last document to the application being submitted took under 48 hours. After that it was the lender's timescale, and my job was chasing them and answering their questions the same day they asked.

What this shows

Buying the first two properties in cash felt like the strong position to the directors. To a lender it meant there was nothing to assess. The deposit route that made sense for their businesses, moving money between companies they own, is one that several lenders simply will not accept. Neither point stopped the purchase. Both would have if the application had gone to the wrong lender first.

This is one case, not a rule. Every application is assessed on its own facts, lender by lender, and your circumstances may produce a different answer. Some buy to let mortgages are not regulated by the FCA. Your property may be repossessed if you do not keep up repayments on your mortgage.