64% of portfolio landlords now intend purchasing in a Ltd co.

by Property 118

9:56 AM, 25th March 2019
About 2 years ago

64% of portfolio landlords now intend purchasing in a Ltd co.

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64% of portfolio landlords now intend purchasing in a Ltd co.

Research released by Precise Mortgages shows nearly two thirds (64%) of all portfolio landlords (64%) with more than four properties who plan to purchase more property this year will do so in the name of a Limited company with only 21% intending to purchase in their individual names.

Further market statistics show 44% of all landlords planning a further purchase will use a Limited company. This drops to 17% for smaller landlords with three or less properties, and 37% of these smaller portfolio landlords will buy as individuals.

More than 60% of  landlords planning to fund new purchases this year will use BTL mortgages, but 73% believe lending criteria and portfolio application process changes introduced by the Prudential Regulation Authority are making it more difficult to secure the BTL funding required.

Alan Cleary, Managing Director of Precise Mortgages, said: “The Buy to Let market is changing and the switch to greater use of limited company status is one aspect of the development underlining the increasing maturity of the sector.

“There are good reasons why limited company Buy to Let is dominating the purchase market and we expect that will continue to be the case this year and next. Brokers and customers however need expert specialist support when buying as a limited company or considering switching to limited company status as there are considerable costs involved.”

These figures clearly show the trend, post Section 24 mortgage interest relief restrictions, to now use a limited company for Buy to Let investment and from other figures we have seen with up to 80% of new purchases being in the name of a limited company could be conservative.



Comments

Mike W

12:15 PM, 25th March 2019
About 2 years ago

Excellent news BUT I have found the market very restrictive. Only two lenders prepared to consider and rates roughly 3% higher than I can get on a personal basis. And these are loans less than 50% LTV but of course Scotland and HMO and students. But they fly like kites. (And that is based on discussions with multiple brokers.) For this option to take off this has to change rapidly. It has severely restricted the rate of transfer of assets to our company.


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