Limited company options:

A survey has found that landlords are continuing to move toward incorporation, with 32% of respondents owning at least one property in a limited company, up 6% on November 2016. This is ongoing proof landlords are thinking seriously about how to adapt to market changes and maximise their returns, although it is portfolio landlords (i.e. those who own four or more mortgaged properties) who lead the way in this regard.

When asked whether future purchases would be made personally or using a limited company, 58% opted for the just incorporated route and 22% said they would use both. The remainder was split down the middle between those who said they would continue to borrow personally and those who had yet to decide how to proceed.

These figures correlate well with the broker’s Limited Company Buy to Let Index, which in Q4 2016 showed that 63% of all new BTL mortgage applications for purchases were made by landlords using corporate vehicles.

The most popular product type was for a five-year fixed rate mortgages with 34% of respondents expressing a preference for this category of loan. This is a return to form after falling popularity in previous surveys.

This is clear evidence that lender’s focus on competitive pricing of five year fixed rates has been successful. Landlords are keen to maintain some certainty of cash flow following a year of economic turbulence and growing speculation that interest rates and inflation will rise later this year.

Despite a tougher operating environment, the proportion of landlords seeking to expand their portfolios rose to 45%, up from 41% in November 2016.

If you are looking for a new or re-mortgage, please do make contact and one of our advisers will be happy to assist.