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Buy to Let

Number of limited company buy-to-let deals doubled in last year

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
26/05/2017

The number of buy-to-let mortgage deals available to landlords holding their properties in a limited company structure has doubled over the last year alone, said Moneyfacts.

The financial information provider has tracked a huge rise in the availability of these mortgages from just five years ago, when only 30 existed, accounting for 5% of the buy-to-let market. One year ago this figure had risen to 133, but now landlords can choose from 313 different products, making up 20% of the market.

Why the rise?

Moneyfacts noted that the buy-to-Let sector has been hit by several tax changes in recent years. As tax reliefs are being cut, landlords are looking at their options, with many considering holding their properties in a limited company structure.

Lenders have responded by making many more of these deals available.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “As the reality of April’s tax changes starts to bite, the proportion of deals available to limited companies has grown dramatically, having increased by 7% in just six months. With the extra pressure in the BTL market and the added interest in limited companies, it is no surprise that lenders have leapt into action and started offering more deals to limited companies.
 
“Despite the boost in product numbers, borrowers considering this type of mortgage should be aware that they could find themselves on a more expensive deal compared to the rest of the BTL market. For example, the average two-year fixed rate BTL mortgage for those applying as a limited company stands at 4.22% today, whereas the average two-year fixed rate for the rest of the market is significantly less at 2.97%.”