November 2023: The difficulty small business owners are experiencing accessing funding without having to sign a personal guarantee has become clear. October 2023 saw the largest number of small business owners ever recorded, taking insurance to mitigate the risk of signing a personal guarantee as a condition of a business loan according to Purbeck Personal Guarantee Insurance.
November 2023: As property rental prices reach record levels according to the latest ONS data, Purbeck Personal Guarantee Insurance is urging the Chancellor of the Exchequer, The Rt Hon Jeremy Hunt MP to reinstate the ability of landlords to set the full amount of mortgage interest against rental income, before tax is calculated. Currently, all of the rental income made from a property is taxed. Landlords can claim back mortgage interest costs but only up to the basic income tax rate of 20 per cent. The restriction of buy-to-let mortgage tax relief, also known as Section 24 can be avoided if a buy to let mortgage is taken in a limited company structure but this type of mortgage can be more expensive and often requires the landlord to sign a personal guarantee.
November 2023: Responding to the oral evidence provided to the Treasury Committee’s Inquiry into SME finance, Todd Davison, MD of Purbeck Personal Guarantee Insurance says:
While a personal guarantee can be the golden ticket in helping you secure crucial funding for business ventures or expansion, it can present an enormous risk to your assets.
November 2023: As the number of buy to let mortgages taken in a limited company structure rises, and property values fall, Purbeck Personal Guarantee Insurance, has launched the first personal guarantee insurance protection for Professional Landlords.
In a development that has sent ripples through the financial industry, the Bank of England recently implemented a freeze on interest rates, marking the first time in two years that the rates have remained unchanged. This measured approach comes as the Bank of England continues to stabilise the economy.
Headline Figures:
October 2023: As Buy to Let mortgage rates start to fall and the number of landlords securing limited company buy to let mortgages rise, Purbeck Personal Guarantee Insurance is warning Professional Landlords to keep their eyes wide open over the risks of personal guarantees as a condition of the mortgage. Purbeck’s analysis shows the average Limited Company Buy to Let Mortgage was £948k in 2022. So far in 2023, the average Buy to Let Mortgage has shrunk to £895k based on Purbeck’s data.
2023 has been a tough year for UK businesses, particularly SMEs, who have had to navigate treacherous economic waters.
Business buy-to-let mortgages provide an excellent opportunity for businesses to invest in commercial property, whether to be let to a third party or to be used as premises to trade from.
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