Buy To Let Purchase Via Company Structures
Almost two thirds of landlords say their next buy to let purchase will be through a limited company, not by themselves as an individual.
Research by Foundation Home Loans at the end of the third quarter of the year reveals that 63 per cent of landlords plan to do a buy to let purchase through a company; this is up from 55 per cent in the second quarter.
Jeff Knight, Foundation’s marketing director, says: “Landlords with large and small portfolios are equally convinced by the limited company model. Mortgage rates and underwriting have become increasingly favourable via limited companies and special purpose vehicles, narrowing the cost margin that previously left landlords choosing to buy in a spouse’s name or as an individual.”
He continues: “Our borrower behaviour data supports the trend: our top-selling BTL product, the Fee Assisted 3.39 per cent has attracted more applications as a limited company than Individual applicant.’
The quarterly report also shows that landlords waiting to decide how to next structure their next property purchase ‘depending on ‘circumstances at the time’ have dropped from 13 per cent to just eight per cent.
“This is an indicator that the limited company model has now gained a foothold; property investors are more reassured that the limited company structure is a feasible way for them to press on with growth plans confidently, whatever next year brings” says Knight.
The study also revealed that in Q3, rental yields nationally recovered only marginally from their Q2 nine-year-low, now up to 5.6 per cent, and that HMOs continue to generate the highest rental yield at 6.5 per cent.