Business

Limited company BTL products now account for 1 in 4

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19th January 2018

New data from Mortgages for Business has revealed that the proportion of buy-to-let products available to limited companies increased during the last quarter of 2017 from 21% to just under a quarter of all products.

Average rates for these mortgages rose slightly in the period due to the introduction of additional five year fixed rates.

Nearly three-quarters of buy-to-let mortgage transactions made by landlords operating via limited companies are being used to buy property rather than for refinance purposes.

However this number is expected to grow to align more with the wider buy-to-let and residential mortgage market as limited company popularity continues and Early Repayment Charge periods expire, allowing landlords to refinance without penalty.

Most of the buy-to-let purchase transactions made through limited companies were related to additional property acquisitions, although the figures also include landlords selling property they already own personally into a corporate structure. All transfers of properties from individuals to limited companies must be treated as a new purchase, and as such will not qualify as a remortgage.

Steve Olejnik, COO at Mortgages for Business, said: “To help landlords determine whether using limited companies is the right strategy for them, we’ve been encouraging our clients to take professional advice. We will also continue to produce guides and webinars which explain how the tax and regulatory changes might impact their investments. The landscape of buy-to-let is changing and it’s important that landlords are equipped to traverse the terrain.”

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