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Almost two-thirds of landlords plan to use limited companies to buy property

Almost two-thirds of landlords planning to add to their portfolio over the next 12 months will use a limited company to acquire property, according to Foundation Home Loans.  

The research from the intermediary-only, specialist lender, shows that limited company purchases have become the preferred option for all landlords, regardless of the size of their portfolios. 

Previously, landlords with larger portfolios of at least 11 properties were more likely to buy property using a limited company, but now landlords with smaller portfolios are also now more likely to opt for this option. 

Some 62% of landlords with up to 10 properties said they would aim to buy next via a limited company, while 65% of those with 11-plus properties unveiled the same strategy. 

The study also found that the vast majority of BTL landlords tend to use mortgage advisors when looking for a new deal. 

Some 73% of landlords said they had carried out their most recent mortgage via an adviser, although one in five - 19% - went direct to a lender, while 1% went via a comparison site. 

Meanwhile, 31% of landlords said they plan to remortgage at least one of their properties over the next 12 months, with 65% of those expecting to use an adviser, 23% likely to go direct to a lender, 3% would fund it by other means, and 10% were unsure.

Jeff Knight, director of marketing at Foundation Home Loans, commented: “The rise in limited company usage by landlords shows no sign of tailing off, particularly as we have a more professional landlord community who recognise the benefits of using such a vehicle.

“It’s therefore perhaps no surprise to see a growing number of landlords signaling their intention to make their next purchase through a limited company, and as a lender it’s incredibly important that our product range reflects this, and we can offer advisers and their portfolio landlord clients access to quality products, an excellent underwriting process and a high level of overall service that taps into the needs of limited company borrowers.

“There has also been a notable uptick in limited company remortgaging at Foundation, and whether these are larger portfolio landlords or not, it’s quite apparent where the market has moved to and the growing need for limited company expertise.”

Poll: Do you plan to use a limited company to acquire property in the near future?

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