Significant rise in limited company buy-to-let mortgage applications

According to the Buy to Let Club, Buy to let landlords are increasingly taking out mortgage applications via limited companies. A suggestion previously by a number of experts in the industry was to set up limited companies as a way of combating the new tax regulations. It appears some landlords have done just that.

This research is supported by other findings that have outlined similar patterns in the buy to let market. Landlords are looking for ways to combat the recent stamp duty surcharge and reduce their tax liability.

Managing Direct of Buy to Let Club, Ying Tan, said: ‘It’s interesting to see that recent data from our B2B arm, Buy to Let Club, does indeed show a significant increase in applications via limited companies. It seems that the early predictions were justified – an increasing number of landlords appear to be adopting this model in order to protect themselves from the reduction in tax relief coming into effect from next year.’

Lenders are reacting quickly to the growing trend of landlords setting up limited companies, with their rates falling as competition amongst lenders heats up. Alan Cleary, managing director at Precise Mortgages, commented: ‘…this type of product is growing in popularity and I expect it to be a popular choice amongst brokers and landlords.”

Precise Mortgages has responded to the changes in the market by launching an exclusive limited company buy-to-let three-year fixed rate mortgage through Buy to Let Club.

Only time will tell how popular limited companies become but it will be intriguing to see if the trend continues to grow and what the effect/s will be.

At Orchard & Shipman we work with highly experienced financial services partners to offer our landlords the best value and quality financial products on the market including mortgages, buildings and personal insurance. If you wish to take advantage of the great mortgage deals currently on offer or if you want to find out how we could assist you with your financial needs, then visit http://www.orchard-shipmancorporate.com/services/financial-services/ or contact Orchard & Shipman today.