There has been another substantial increase in the number of buy to let mortgage applications made by limited companies - suggesting more landlords are incorporating as a way of beating recently-announced curbs on landlords’ mortgage interest tax relief.
According to Mortgages For Business, a broker, limited company applications accounted for 43 per cent of its new BTL activity in January - up from 38 per cent in December.
The overall number of BTL applications dealt with last month by the company, from individuals and limited companies combined, was 27 per cent more than a month earlier - an indication that landlords are trying to beat the April 1 deadline from which the government’s three per cent stamp duty surcharge comes in to effect on buy to let property purchases.
“Landlords have woken up to the fact that transacting via a corporate vehicle is a feasible option and in many cases, the most prudent route going forward. I wouldn’t be surprised if the percentage continues to rise as landlords, especially the higher tax rate-paying ones, prepare for the forthcoming changes to relief on finance costs” according to David Whittaker, managing director of Mortgages for Business.
“The increase is due to landlords trying to get as many purchases as they can completed before the surcharge, after which I would expect transactions to return to more considered levels” he says.