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More landlords set to use limited companies when buying property

Monday 11 November 2019

Almost two-thirds of landlords planning to add to their portfolio over the next 12 months will use a limited company to acquire property, according to new research. 
A report from Foundation Home Loans, an intermediary-only, specialist lender, shows that limited company purchases have become the preferred option for all landlords, regardless of the size of their portfolios.
Previously, landlords with larger portfolios of at least 11 properties were more likely to buy property using a limited company, but now landlords with smaller portfolios are also now more likely to opt for this option.
Some 62 per cent of landlords with up to 10 properties said they would aim to buy next via a limited company, while 65 per cent of those with 11-plus properties unveiled the same strategy.
The study also found that the vast majority of BTL landlords tend to use mortgage advisors when looking for a new deal.
Some 73 per cent of landlords said they had carried out their most recent mortgage via an adviser, although one in five – 19 per cent - went direct to a lender, while 1 per cent went via a comparison site.
Meanwhile, 31 per cent of landlords said they plan to remortgage at least one of their properties over the next 12 months, with 65 per cent of those expecting to use an adviser, 23 per cent likely to go direct to a lender, 3 per cent would fund it by other means, and 10 per cent were unsure.
Jeff Knight, director of marketing at Foundation Home Loans, commented: “The rise in limited company usage by landlords shows no sign of tailing off, particularly as we have a more professional landlord community who recognise the benefits of using such a vehicle.
“It’s therefore perhaps no surprise to see a growing number of landlords signalling their intention to make their next purchase through a limited company, and as a lender it’s incredibly important that our product range reflects this, and we can offer advisers and their portfolio landlord clients access to quality products, an excellent underwriting process and a high level of overall service that taps into the needs of limited company borrowers.
“There has also been a notable uptick in limited company remortgaging at Foundation, and whether these are larger portfolio landlords or not, it’s quite apparent where the market has moved to and the growing need for limited company expertise.”

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