Godiva Mortgages
Godiva Mortgages | Buy-to-Let & Limited Company Advice
Godiva Mortgages is part of the Coventry Building Society Group and provides buy-to-let mortgages for landlords.
At Kerr & Watson, we may consider Godiva for individual landlords, first-time landlords, portfolio landlords and investors purchasing through qualifying limited companies.
Godiva can be particularly relevant where a landlord has little or no conventional earned income, as its buy-to-let affordability is primarily driven by the property’s rental income rather than requiring applicants to meet a fixed minimum salary.
However, Godiva has some important restrictions around first-time buyers, larger HMOs, limited-company structures and recently converted residential properties, so it will not suit every landlord.
Could Godiva be the right buy-to-let lender for you?
Godiva can work particularly well for landlords with straightforward properties and ownership structures where the rental income meets the lender’s affordability requirements.
At Kerr & Watson, we compare Godiva with other suitable buy-to-let lenders to establish which mortgage and lending criteria are most appropriate for your property and wider circumstances.
Godiva Mortgages at a glance
| Godiva Mortgages | |
|---|---|
| Residential owner-occupier new lending | This page focuses on Godiva’s BTL proposition |
| Buy-to-let mortgages | Yes |
| Personal-name BTL | Yes |
| Limited company BTL | Yes |
| First-time landlords | Yes |
| First-time buyers | No |
| Minimum earned income | No |
| Portfolio landlords | Yes |
| Maximum mortgaged BTL portfolio | 15 across all lenders |
| Maximum within Coventry Building Society Group | 7 mortgaged BTL properties |
| Limited company SPVs | Yes, subject to criteria |
| Layered companies | No |
| Director’s loan deposit | Can be considered |
| Intercompany loan deposit | No |
| Mandatory-licensed HMOs | Generally not accepted |
| Shared accommodation | Certain smaller cases considered |
| Corporate tenancies | Considered subject to criteria |
| New-build houses | Considered |
| New-build flats | Restricted |
| Product transfers | Available to existing customers |
Mortgage criteria and products can change, so we check Godiva’s current requirements before recommending an application.
Godiva Mortgages Case Studies
We have helped landlords secure buy-to-let mortgages with Godiva Mortgages in a range of circumstances, including remortgages where credit history needed careful consideration.
The case studies below show real examples of customers we have helped and demonstrate how factors such as adverse credit, rental income, loan-to-value, property type and lender criteria can affect the mortgage options available.
- Buy-to-let remortgage in Basingstoke with adverse credit
- Brighton BTL Product Transfer Before Expiry
- Buy-to-Let Purchase in Bracknell After Divorce
Who are Godiva Mortgages?
Godiva Mortgages Limited is part of the Coventry Building Society Group.
Godiva is particularly associated with buy-to-let lending, while new mortgage applications are accessed through Coventry for Intermediaries.
Its buy-to-let proposition covers both individual landlords and qualifying limited companies.
Godiva’s criteria are relatively structured, which means it can work very well where a case fits but may offer less flexibility than specialist lenders for unusual company structures, larger HMOs or more complex property types.
When might we consider Godiva?
We may consider Godiva where the circumstances involve:
- A standard buy-to-let purchase.
- A buy-to-let remortgage.
- A first-time landlord who already owns property.
- A landlord with little or no earned income.
- A portfolio landlord within Godiva’s property limits.
- A qualifying limited company SPV.
- A landlord using a director’s loan towards the company deposit.
- Smaller shared accommodation.
- Certain corporate tenancies.
- An existing Godiva customer reviewing their mortgage product.
Godiva may be particularly competitive where the case is relatively straightforward and the property’s rent comfortably supports the required mortgage.
Does Godiva have a minimum income requirement?
Godiva does not currently require applicants to have a minimum amount of earned income for its buy-to-let mortgages.
This is an important distinction from lenders that require landlords to earn, for example, £25,000 or £30,000 from employment or self-employment before they will consider an application.
Godiva states that buy-to-let affordability is primarily based on its Interest Coverage Ratio calculation.
This can make it relevant for:
- Full-time landlords.
- Retired landlords.
- Applicants whose main income comes from property.
- Applicants with relatively low conventional employment income.
Godiva can still request evidence of income and will assess the applicant’s wider financial circumstances and credit history.
No minimum income therefore does not mean that personal finances are completely ignored.
How does Godiva calculate buy-to-let affordability?
Like most buy-to-let lenders, Godiva uses an Interest Coverage Ratio, commonly called an ICR.
The ICR compares the property’s expected monthly rent against a stressed mortgage interest payment.
For personally owned buy-to-let property, the required rental coverage can depend on the applicants’ income and tax position.
Godiva currently applies a lower rental coverage requirement for qualifying lower-rate taxpayers and a higher requirement where an applicant falls within the higher-rate taxpayer category.
Limited-company applications currently use a separate 125% ICR requirement.
The precise stress rate can also depend on the mortgage product selected, so we calculate affordability using Godiva’s current calculator before recommending an application.
Why does your tax position affect buy-to-let affordability?
For personally owned property, higher-rate taxpayers can face different tax treatment on mortgage interest from basic-rate taxpayers.
Some buy-to-let lenders therefore require more rental income from higher-rate taxpayers.
This means two landlords purchasing exactly the same property with exactly the same rent can potentially receive different maximum mortgage amounts.
Limited-company rental calculations are often treated differently.
This is one reason why we check the required mortgage against several lenders rather than assuming the lender with the lowest headline rate will provide enough borrowing.
Godiva mortgages for first-time landlords
Godiva accepts first-time landlords.
A first-time landlord is someone buying their first rental property but who has previously owned property.
For example, someone who owns their residential home and wants to buy their first investment property may potentially qualify.
However, Godiva does not currently accept a true first-time buyer purchasing their first ever property as a buy-to-let.
This distinction is important.
Someone can therefore be a:
- First-time landlord: potentially acceptable.
- First-time buyer and first-time landlord: not currently acceptable.
Where someone has never owned property before, we would compare lenders specifically willing to consider first-time buyer buy-to-let applications.
Godiva limited company buy-to-let mortgages
Godiva now offers a dedicated limited company buy-to-let proposition.
However, the company needs to meet fairly specific criteria.
Godiva is primarily interested in straightforward Special Purpose Vehicles established for property activity rather than complex corporate groups.
The company must use one or more of Godiva’s accepted property-related SIC codes.
Its current accepted SIC codes include:
- 68100 – Buying and selling of own real estate.
- 68209 – Other letting and operating of own or leased real estate.
- 68320 – Management of real estate on a fee or contract basis.
Companies with unrelated SIC codes do not currently fit the standard proposition.
Who needs to be included on a Godiva limited company mortgage?
Godiva can accept up to four directors or shareholders on the application.
The applicants normally need to hold at least 80% of the shareholding and voting rights within the borrowing company.
Godiva also expects relevant directors, Persons with Significant Control and shareholders to be included in the application, subject to limited exceptions for minor shareholdings held by children.
Each relevant applicant will normally provide a personal guarantee.
Independent legal advice is also required in relation to the guarantee.
At least one director or shareholder must currently be an owner-occupier.
Can a newly created SPV use Godiva?
A limited company does not necessarily need to have owned property for years before Godiva can consider it.
What matters is that the SPV itself meets the lender’s company requirements and that the individuals behind it meet Godiva’s applicant criteria.
We would normally check:
- Company registration.
- SIC codes.
- Directors.
- Shareholders.
- Persons with Significant Control.
- Voting rights.
- Existing company borrowing.
- Source of deposit.
before submitting the application.
Godiva does not accept layered companies
Godiva is more restrictive than other specialist BTL providers where the company sits within a wider corporate structure.
Godiva does not currently accept layered limited companies.
For example:
Individual → Holding Company → Property SPV
would normally fall outside Godiva’s standard criteria.
Likewise, the borrowing SPV cannot own a subsidiary.
Professional landlords using holding companies or more complicated group structures will therefore normally require a lender that specifically accepts layered companies.
Using a director’s loan for the deposit
Godiva can accept an unsecured director’s loan as a source of funds for a limited-company purchase.
A director may, for example, lend personal savings to their property SPV so the company can fund the deposit.
The lender will still need evidence of where the director originally obtained the money.
Godiva can also consider retained profits already held within the borrowing company.
Godiva and intercompany loans
Intercompany loans are treated differently.
Godiva does not currently accept an intercompany loan as the deposit source for a limited-company buy-to-let application.
For example, if an applicant owns:
Trading Company Ltd
and
Property SPV Ltd
and Trading Company Ltd loans the deposit to Property SPV Ltd, Godiva would not normally accept that arrangement.
Several specialist lenders do consider intercompany loans, so this would not necessarily prevent the landlord obtaining a mortgage elsewhere.
Godiva portfolio landlord mortgages
Godiva can consider portfolio landlords.
A portfolio landlord is currently defined as someone who has four or more mortgaged buy-to-let properties in aggregate.
Properties can include mortgages held:
- Personally.
- Jointly.
- Through a limited company where the applicants are directors, shareholders or Persons with Significant Control.
Once a customer falls within the portfolio definition, Godiva assesses both the new property and the wider portfolio.
How many properties can you have with Godiva?
Godiva currently allows a household to have up to seven mortgaged buy-to-let properties within the Coventry Building Society Group.
The household can have a maximum of 15 mortgaged buy-to-let properties across all lenders.
This makes Godiva suitable for many small and medium-sized property portfolios but less appropriate for professional landlords with substantially larger numbers of mortgaged properties.
For a landlord with more than 15 mortgaged BTLs, we would instead consider lenders with a larger or unlimited portfolio appetite.
How does Godiva assess a portfolio landlord?
Godiva assesses the wider portfolio rather than looking only at the property being mortgaged.
The lender currently applies a rental stress calculation across the background portfolio.
We may therefore need information covering:
- Property addresses.
- Values.
- Mortgage balances.
- Monthly rents.
- Lenders.
- Ownership.
- Limited companies.
- Mortgage products.
A new property might comfortably pass its individual rental calculation but the application could still fail if the wider portfolio does not meet Godiva’s requirements.
Godiva and HMOs
Godiva should not be described as a general specialist HMO lender.
Its current criteria do not accept properties that require a mandatory HMO licence, except for the different licensing position applying in Scotland.
That means landlords purchasing a conventional larger licensed HMO would normally need another lender.
This is an important distinction from lenders such as CHL, Foundation, Fleet or specialist HMO providers.
Smaller shared properties
Godiva can consider certain smaller shared properties.
Its criteria allow properties occupied by up to four tenants where the property remains suitable for occupation as a normal family home and the tenancy arrangement meets its requirements.
Properties subject to an Additional HMO licensing scheme may also be considered within Godiva’s limits.
However, properties designed or significantly converted for multiple occupancy, including those with multiple kitchens, can fall outside the lender’s criteria.
We therefore establish the property’s licensing, layout and proposed tenancy before treating Godiva as a suitable option.
Godiva corporate tenancy mortgages
Godiva can consider certain corporate tenancy agreements.
Instead of the landlord granting the tenancy directly to the people living in the property, the agreement may be with a company that houses its employees or other qualifying occupiers.
Godiva currently permits corporate tenancy agreements of up to 36 months, subject to the terms of the agreement.
The exact lease needs to be reviewed because restrictions apply around subletting and the rights given to the corporate tenant.
Godiva new-build buy-to-let mortgages
Godiva can consider new-build buy-to-let properties, but there is a significant difference between houses and flats.
New-build houses can be considered at materially higher loan-to-value levels than new-build flats.
Godiva currently limits new-build or newly converted flats, apartments and coach houses to 50% loan-to-value.
This is a substantial restriction compared with many other buy-to-let lenders.
A landlord buying a new-build flat with a conventional 25% deposit would therefore normally need another lender.
Why is Godiva more cautious with new-build flats?
Mortgage lenders can apply additional restrictions to new-build flats because of factors such as:
- Developer incentives.
- Investor concentration.
- Potential initial price premiums.
- Resale demand.
- Large numbers of similar properties completing together.
Godiva also considers the wider concentration of properties an applicant owns within the same development.
This is why we check the specific property rather than assuming a lender’s standard maximum LTV applies equally to houses and flats.
Godiva remortgages
Godiva can consider existing buy-to-let properties being remortgaged from another lender.
However, the property normally needs to have been owned for at least six months before the application.
There is an exception for inherited properties.
This means Godiva is generally not the lender we would select where an investor needs a genuine day-one remortgage following a cash or bridging purchase.
Other lenders have more flexible criteria for early refinancing.
Can you convert your current home to a Godiva buy-to-let?
Godiva does not normally accept a straightforward remortgage where the property is still being used as the applicant’s main residence and is being converted immediately onto buy-to-let.
Where the property has already been let, Godiva can consider a remortgage once it has been rented for the required period and the existing mortgage has been conducted satisfactorily.
This makes Godiva less flexible for traditional let-to-buy transactions than some competing lenders.
If you are moving home and want to retain your existing residence as a rental property, we would usually check other lenders alongside Godiva.
Capital raising with Godiva
Godiva permits capital raising on existing buy-to-let property for several property-related purposes.
Depending on its current criteria, this can include:
- Property improvements.
- Repairs.
- Deposits for additional investment property.
- Funding the purchase of another investment property.
- Funding a residential property purchase.
- Extending a lease.
- Buying a freehold.
- Buying another party’s equity.
- Purchasing additional land.
- Repaying a mortgage secured against another property.
However, Godiva does not accept every capital-raising purpose.
For example, conventional debt consolidation is not currently permitted under its standard BTL criteria.
Godiva and property condition
The property needs to provide acceptable mortgage security and normally be suitable for residential letting.
Godiva’s valuer will consider matters such as:
- Condition.
- Construction.
- Location.
- Marketability.
- Rental demand.
- Nearby commercial use.
- Lease terms.
- Building safety.
A property fitting the applicant and rental criteria can still therefore be declined because of the property itself.
Properties close to commercial premises
Godiva can consider some properties situated near commercial premises.
Rather than using a simple blanket rule, the lender relies on its valuer to assess how the neighbouring commercial use affects the residential property.
A flat above an office, for example, may present a different risk from one above a late-night takeaway or pub.
The effect on noise, odour, access, insurance and future resale demand can all be relevant.
Godiva and non-standard construction
Some non-standard construction methods can also be considered subject to valuation.
Property construction is particularly valuation-sensitive, so we would normally check the exact construction method before submitting an application rather than relying on a general statement that non-standard construction is accepted.
Godiva product transfers
Existing Godiva customers can switch to another mortgage product when their current deal approaches its end.
Godiva currently allows qualifying customers to secure a new product when there are fewer than four months remaining on the existing deal.
Where the mortgage is otherwise unchanged, a product transfer can avoid the full underwriting, legal work and valuation normally associated with remortgaging to another lender.
Some straightforward customers can complete the switch directly online.
Portfolio landlords or customers wanting to alter the mortgage may need a different process.
Should you stay with Godiva at the end of your fixed rate?
Not automatically.
A Godiva product transfer may be convenient, but we would still consider:
- The available Godiva rate.
- Product fees.
- Remaining mortgage balance.
- Current property value.
- Rental income.
- Other lender options.
- Wider portfolio.
- Future investment plans.
- Any additional borrowing required.
In some cases remaining with Godiva will be suitable.
In others, remortgaging to a different lender could provide a better rate, a more flexible rental calculation or borrowing better suited to the landlord’s future plans.
When might Godiva not be the right lender?
Godiva’s criteria work particularly well for relatively straightforward BTL cases, but another lender may be more appropriate where:
- You are a first-time buyer purchasing your first property as a BTL.
- You are purchasing a larger licensed HMO.
- You have more than 15 mortgaged BTL properties.
- You use a layered limited-company structure.
- Your deposit is being funded by an intercompany loan.
- You need to remortgage within six months of purchasing.
- You are converting your current home immediately onto buy-to-let.
- You require high-LTV finance on a new-build flat.
- The property has a more specialist configuration.
- Another lender produces a more favourable rental calculation.
The fact that Godiva does not impose a minimum income requirement does not automatically mean it will be the best lender for a low-income landlord.
The property, rent, portfolio and ownership structure remain important.
What we check before recommending Godiva
Before recommending Godiva, we normally establish:
- Property value.
- Expected monthly rent.
- Required mortgage.
- Applicant’s tax status.
- Existing property ownership.
- Number of mortgaged BTL properties.
- Credit history.
- Property type.
- Tenancy arrangements.
- Whether the property requires an HMO licence.
- Whether the transaction is a purchase or remortgage.
For limited companies we additionally check:
- SIC codes.
- Directors.
- Shareholders.
- Persons with Significant Control.
- Shareholding and voting rights.
- Company structure.
- Source of deposit.
- Whether another company sits above or below the SPV.
This allows us to identify problems with Godiva’s criteria before making an application.
Do you have to use Godiva Mortgages?
No.
Kerr & Watson is an independent, whole-of-market mortgage brokerage, so we can compare Godiva with other suitable buy-to-let lenders.
Godiva can be particularly useful for straightforward personal and limited-company buy-to-let cases where the rental income meets its requirements.
However, landlords with larger portfolios, specialist properties or more complicated corporate structures may find another lender offers greater flexibility.
Our role is to identify which lender and mortgage provide the most suitable overall solution for your circumstances.
Speak to a mortgage adviser about Godiva Mortgages
If you are considering Godiva for a buy-to-let mortgage, limited-company purchase, remortgage or portfolio property, we can review the transaction before an application is submitted.
We can assess the rental income, property, portfolio and ownership structure before comparing Godiva with other suitable buy-to-let lenders.
Lender criteria, affordability calculations, product availability and lending terms can change. The information on this page is intended as a general guide and should not be relied upon as confirmation that a lender will accept a particular application or that a particular mortgage or finance product will be suitable for you.
The information on this page does not constitute personalised mortgage advice or a recommendation. The regulatory status of a mortgage or loan depends on the type of transaction and your circumstances. Many buy-to-let and commercial mortgages, and some bridging loans, are not regulated by the Financial Conduct Authority. Your home or other property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
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