Research shows the increase in use of Ltd companies post S24

Research shows the increase in use of Ltd companies post S24

11:53 AM, 11th June 2018, About 6 years ago 5

Text Size

Research conducted and published by Precise Mortgages shows 38% of landlords will use limited companies to buy properties over the next year compared to 28% as individuals. This is in the wake of Section 24 mortgage interest relief restrictions.

42% of landlords with portfolios of more than four properties will be buying through a limited company, but this drops to 31% of landlords with smaller portfolios of 3 or less properties.

89% of brokers expect the number of landlords setting themselves up as a limited company to increase with the ability to continue to claim tax relief on mortgage interest seen as the main motivation.

London landlords are the most likely to be planning to purchase through a limited company.

Alan Cleary, Managing Director of Precise Mortgages, said: “Buying property within a limited company structure has become increasingly popular, particularly among larger professional landlords. Given the predicted rise in landlords switching to limited company status this year, we can expect this trend to continue.

“The contrasting levels of awareness of the PRA’s recent changes to lending criteria and the application process between small and larger portfolio landlords points to the growing professionalisation of the latter group who stand to be the most affected.

“Precise Mortgages is currently one of the most recommended specialist mortgage lenders, helping landlords to find solutions and supporting them through the process.”

Click Here to read the full report


Share This Article



13:15 PM, 11th June 2018, About 6 years ago

Be careful!
Recent bad experience shows that Precise cannot properly handle lending to a Ltd Co having Beneficial Ownership of properties, which is the kind of structure promoted by P118 and others to deal with S24.
Unhappy Bunny.

Whiteskifreak Surrey

13:34 PM, 11th June 2018, About 6 years ago

Somewhere - I think on the Property Tribes - I also read a warning that even if the taxes when converting to Ltd are not immediately payable, HMRC is bound to catch up with them later on. that would be a massive cost, especially with more expensive properties. I am not sure if I have not mixed up the info, but definitely there was a warning about HMRC potential action on converting.
Please correct me / comment if I am wrong.

Richard Connell

14:03 PM, 11th June 2018, About 6 years ago

Reply to the comment left by Richard Peeters at 11/06/2018 - 13:15
I'm not surprised. As I believe it this whole system of BICT was set up based on the fact that if you didn't ask the mortgage providers then they wouldn't object to it. However I always wondered what would happen when you came to remortgage and now we have the PRA increased regulations, the mortgage company will ask for evidence of rent payments for all your properties. However your rent is now getting channelled through the ltd company at which point the mortgage company goes nah, don't think we'll lend to you, which sounds like the issue that Richard Peeters has. This is how I see it but being no expert , happy to be corrected

NW Landlord

15:06 PM, 11th June 2018, About 6 years ago

I have incorporated using BICT and aM refinancing one with fleet had no issues. I have also sold two aswell with no issues whatsoever.

Ali Asgur

17:05 PM, 11th June 2018, About 6 years ago

The other huge benefit of incorporating is more favourable mortgage stress tests

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