Limited company deals gather momentum
For the first time, limited companies have outdone landlords when it comes to buy-to-let lending. Buy-to-let lenders deciding to incorporate, due to recent tax changes have now reached a point where these incorporated landlords make up 51% of lenders by volume.
What does this mean?
Recent data shows that in the second quarter of 2017 (April-June), limited companies borrowed more than landlords when looking at the volume of buy-to-let in British pounds. In fact, limited companies performed 73% of buy-to-let purchase completions, an increase of more than 10% on the 62% figure from the first quarter of the year.
When it comes to re-mortgaging, individual landlords still outperform limited companies, but not by much, with the volume of re-mortgage lending for limited companies increasing by 3% to 40%. What this could mean is that while first-time landlords are buying properties after incorporating, possibly following expert advice, existing landlords are still hesitating to make the jump.
Landlords are increasingly looking to limited company structures due to the benefits they bring in the form of tax efficiencies and softer affordability testing. The structures are not without their hurdles; however, it is recommended take professional tax advice before deciding how to proceed.
So, given the difficulties that existing landlords may face when switching to a limited company, is it worth the hassle? This can only be determined from a tax perspective, as this will require tailored, expert advice.
Need help?
If you are looking for a new or re-mortgage please do get in touch and one of our advisers will be happy to help.