Lending for Incorporated Landlords goes up
A market survey by Mortgages for Business has shown a big increase in lending to landlords who have incorporated.
The number of transactions increased to 30pc of all completions in the first half of the year, up from 18pc in the same period of 2015.
MFB also says that the number of lenders offering products to limited company borrowers rose to 14, up from 12 six months ago, and the number of products available rose from 147 to 154 in the first half of 2016.
Landlords have started turning their portfolios into privately owned businesses to minimise the tax liabilities being introduced from 2017 onwards.
David Whittaker is the Managing Director of MFB. He believes that the Chancellor's intention to drop corporation tax to 15pc could also lead to further incorporation by landlords in the near future.
"Clearly, the trend for limited company buy-to-let represents a real step change in behaviour as landlords adapt their investment strategies to mitigate the increased costs brought about by recent changes in the tax regime."
David Hollingworth from London & Country, the UK's largest fee-free mortgage advisor, said: "As the changes to tax relief begin to bite for landlords from next April there is bound to be more interest in the potential benefits of buying property through a limited company.
"Although it won't be for everyone and needs careful consideration, as more landlords decide to incorporate, the more likely it is that other lenders will start to accommodate limited company lending. Therefore, as lender choice builds, the range of deal and rates on offer should also hopefully improve."