A growing number of landlords are using a Special Purpose Vehicle (SPV) as a tax-efficient way of holding a portfolio of buy-to-let properties as well as fund the acquisition of additional homes, according to Roma Finance.
Given the government’ decision to phase out mortgage interest relief and the fact that mortgage lenders introduced new tougher criteria late last year for portfolio landlords with four or more mortgaged buy-to-let properties, it is perhaps unsurprising to find the bridging lender report that a number of its bridging loans for buy-to-let purposes are now put through for limited companies as opposed to individuals, as landlords look to maximise profits.
Roma also report that the type of property landlords are acquiring has changed of late, reflecting the changing market, with HMOs and semi-commercial property now proving more popular.
Scott Marshall, managing director at Roma Finance, commented: “We’re seeing most of our landlord customers with larger portfolios transferring them into limited company status and using SPVs to help raise the new funding needed for purchases and refurbishments.
“The market in this segment remains upbeat with our share of lending on buy-to-let still strong for a wide range of property acquisition and refurbishment.
“Landlords and property investors have put in place new company structures and strategies to protect their portfolios and maximise future income and growth.
“We’re seeing this in practice and business written on limited company buy-to-lets is strong as the landlords we work with are very well informed on these investment techniques.”