How to buy multiple properties with one mortgage: what options are available to you?

Plenty of Landlords across the UK own property portfolios, as opposed to single assets. This is especially true for those whose only source of income comes from rent-paying tenants, or whose career surrounds the buy-to-let market (BTL).

Many inexperienced property investors, or accidental landlords, will likely start off with just 1 or 2 properties. But, given the size of the UK private rental sector (PRS), many could own several dozen homes.

In England alone, there are an estimated 408,000 landlords. The latest English Private Landlord survey found there are around 4.4 million households in the PRS. This equates to roughly 11 properties per landlord.

Having 11 BTL mortgages at play could prove to be costly, as well as burdensome. If you own several properties, or are thinking of expanding into the BTL market, you have probably wondered how to buy multiple properties with one mortgage. You may even be wondering if it’s even possible.

To help you, we’ve put this blog together which breaks down the options available to you, how specialist finance could help, and what you need to do to get the ball rolling.

Source: The Times

Are there even products out there for this?

What you’re after is what we commonly refer to as multiple property mortgages. They’re also frequently known as portfolio mortgages, or BTL portfolio mortgages. These are often single, first charge mortgages, secured against multiple BTL properties.

But, knowing what they’re called does not necessarily make answering the question of how to buy multiple properties with one mortgage any easier. A BTL portfolio mortgage is not a specific product.  Rather, it’s a term of reference used by lenders for landlords who (usually) have at least four mortgages on rental properties, and are looking to borrow to expand further.

Individual mortgage products may be available to these landlords, which allows them to combine some or all of their BTL assets under one umbrella. You may opt to have a (typically) large mortgage that covers all your investments, leaving you with a single obligation, rather than multiple.

Source: Online Mortgage Advisor

How do multiple property mortgages differ from standard mortgages?

Generally, availability and eligibility for portfolio mortgages will vary between lenders. But, where you do find them, they’ll likely be more expensive than their “regular” counterparts – reflecting the added complexity. This may involve higher rates, along with shorter terms, and higher minimum loan amounts.

What’s more, to qualify for a multiple property mortgage, you may need to evidence affordability with rental forecasts for the properties you’re buying/incorporating. Some lenders will want to see a rental forecast amounting to at least 125% of the total mortgage payments. Others may have a minimum of 150%. Approved letting agents might need to conduct rental projections, adding to your costs and admin.

But, portfolio mortgages do offer several advantages for landlords. Having a single mortgage to cover may prove easier than dealing with multiple. This may involve lower legal costs, and your lender will likely view your properties collectively. Meaning, if one doesn’t pass a rigid rental calculation, others in your portfolio could make up the shortfall.

Source: Online Mortgage Advisor

What about the specifics – maximum number of properties, the types of assets allowed, maximum loan amounts?

There are many variables for the question of how to buy multiple properties with one mortgage. Ultimately, lender affect these variables themselves. Some may choose to place a limit on how many properties can be incorporated into a portfolio mortgage. There will also be variations in the minimum and maximum loan amounts.

You’ll likely face rigid criteria on the high street for multiple property mortgage. That is, if you can find them at all. It may prove difficult to attain one of these mortgages with the mainstream lenders at the moment, given wider hesitancy in the market.

While the market has recovered somewhat since September’s mini-budget, there are still fewer mortgage products available now compared to 2022’s summer peak. Total mortgage lending figures, along with total mortgages approved, have also dropped.

As the future looked especially uncertain in late-2022, mainstream lenders embraced caution. They pulled deals, and tightened their criteria. High street banks may only be willing to lend to the most straightforward cases.

Source: Moneyfacts, The Guardian, Reuters

How quickly could I get a multiple property mortgage?

Ultimately, you will need to decide if a portfolio mortgage is right for you. You will need to weigh up the pros and cons, and think about your long-term investment goals.

If you do want to move ahead, and you find an option that matches your requirements, you’ll need to remember the elements that are outside of your control. Chiefly, this concerns speed. Again, how quickly you’ll receive funding will vary from lender to lender, but multiple property mortgages will likely face longer turnaround times.

In the current market, property investments in their entirety have slowed right down. The average timescale for a mortgage according to USwitch, where everything runs smoothly, sits between 2 and 6 weeks.

However, mortgage brokers and other property firms recently wrote an open letter to the government, pushing for faster homebuyer times. This is after it came to light that many transactions are now taking 133 days to complete – a far cry from the 2 to 6 week average quoted above. This is almost 80% longer than in 2007 – right in the middle of a global credit crunch.

Source: Uswitch, Mortgage Strategy

How to get started, and can specialist finance help?

You’ll need to evaluate your options but with a potentially limited selection, you may want to work with a broker. Mortgage brokers will be familiar with the market. They’ll know where to look to find more niche products. They may even have exclusive access to certain mortgages which are not available to direct borrowers.

You may also find more optionality with specialist finance. Where mainstream lenders withdraw from the more complicated corners of the market, bespoke providers could pick up the slack.

At MFS, we have no problem working with those with large portfolios, or who wish to consolidate their assets. We’re happy to have multiple properties on a single solution, and this isn’t exclusive to standard flats or houses either.

Our loans can be spread across no room limit HMOs, MUFBs of up to 30 units, and holiday lets. And where everything lines up, we can deliver funding in as little as a week from your initial enquiry.

We understand the challenges you’re facing in the current market. We know your costs are rising, and that it’s becoming difficult to manage a portfolio of properties. We’re here to help you minimise these stresses in any way we can. Allow us to help you find out how you can buy multiple properties with one mortgage.