Limited landlord BTL hike

With the tax change deadline creeping ever closer, more and more landlords are looking to incorporation as a simple fix to their HMRC-headache.

Setting yourself up as a limited company is being lauded as the catch-all method to maximizing tax efficiency, with more and more mortgage applications being made via limited companies according to the latest data from Mortgages for Business.

A total of 69% of total purchase applications for buy-to-let properties made in the fourth quarter of 2016 were made through limited companies, a hike of 6% compared to the third quarter of the year.

However, whilst the tax benefits may make this option seem more attractive, many landlords who have taken the plunge are finding that the amount of options offered to them are substantially decreased, with only 14 lenders offering products aimed at this type of borrower.

The sharp increase in purchase applications made by landlords using a limited company structure is unsurprising given the financial incentive to do so, and it is encouraging to see growing numbers of landlords approaching their investments intelligently. With the changes to tax relief set to be phased in from April 2017, this trend is unlikely to be reversed any time soon. Although many mainstream lenders do not yet have an offering for investors using limited companies, many smaller lenders have significant expertise when it comes to servicing this part of the market.

Mortgages for Business managing director, David Whittaker

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