Landlords much more likely to purchase via limited company vehicles

Landlords who are planning to add to portfolios in the next year, are much more likely to do so via a limited company vehicle, latest landlord research from Foundation Home Loans has revealed.

While just 14 per cent of landlords said they would be seeking to purchase property over the next 12 months, over half of those (55%) would do so via a limited company, up from 53% in the quarter one iteration of the research.

Twenty-four per cent of those who said they would be purchasing would do so as an individual – down from 26% three months ago, while 13% said it would depend on their circumstances at the time.

Close to seven in 10 landlords said they would be using a buy-to-let mortgage to fund their next purchase, with the same number saying they used a mortgage adviser to arrange their most recent buy-to-let mortgage. This number was higher for those with larger portfolios with 75% of those with six to 10 properties using an adviser and 72% of those with 11 to 19 properties. Those with only one property were more likely to have gone to a lender direct when sourcing their finance with 31% having chose this method of finance for their last buy-to-let mortgage, although the average for all landlords was less at 20%.

Foundation Home Loans director of marketing Jeff Knight said: “It’s clear that the majority of those landlords who will be purchasing over the next 12 months, intend to do so via a limited company, while we are also seeing a growing number of landlords willing to take the stamp duty hit in order to move properties from their individual name.

“Clearly, if this new government were to provide any stamp duty incentive to landlords, as well as residential homeowners, we might expect such a trend to grow rapidly. Whether this is on the agenda alongside potential cuts to stamp duty for those purchasing their main home, remains to be seen.”

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