Limited company buy to let mortgages on the rise – Paragon

Limited company buy to let mortgages on the rise – Paragon

0:02 AM, 24th January 2024, About 3 months ago

Text Size

Nearly half of mortgage brokers in the UK expect to see more buy to let business from landlords operating through limited companies in the next year, a survey reveals.

According to Paragon Bank, more than 300 brokers were questioned and 49% of them are predicting an increase in buy to let mortgages for portfolio landlords using limited company structures. Portfolio landlords are those who own four or more properties.

Another 45% of brokers predict a rise in BTL mortgages for non-portfolio landlords who also opt for limited company structures and who own fewer than four properties.

‘Right to expect to see more limited company business’

Paragon’s commercial director of mortgages, Louisa Sedgwick, said: “I think intermediaries are right to expect to see more limited company business this year.

“It is a structure that has become increasingly popular with landlords in recent years as they have responded to Government changes to the tax treatment of buy to let property ownership.”

She added: “Owning properties through a limited company can enable landlords to offset finance costs, such as mortgage interest, against rental income.

“It’s wise for borrowers to seek professional advice because incorporation may not be the best route for all landlords and the benefits can vary based on individual circumstances.”

29% of mortgage cases are for portfolio landlords

Currently, 29% of mortgage cases are for portfolio landlords with limited companies, while 15% are for non-portfolio landlords with limited companies.

The survey also revealed that only 11% of brokers expect to do more business with landlords who borrow in their personal names, regardless of their portfolio size.

The survey results are consistent with those of a separate study by Paragon, which showed that 64% of landlords who plan to invest in property in the next 12 months will do so through a limited company, compared to 15% who will finance in personal name.

This limited company purchase intent proportion is averaged across the range of portfolio sizes and increases to 82% amongst landlords with six or more properties.

For more information about landlord tax and incorporation, contact Property118’s experts:

Book a Landlord Tax Planning Consultation

  • Hidden
  • Hidden
    Please provide an overview of your circumstances and what you are looking to achieve.
  • For the avoidance of doubt, we are able to assist landlords who own properties in England, Northern Ireland, Scotland and Wales. Where you reside is not a problem, even if you are resident outside the UK.
  • Landlord Tax Planning Consultancy is the core business activity of Property118 Limited (in association with Cotswold Barristers).

Share This Article

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now