One of Britain’s leading buy to let mortgage companies says it anticipates that over three quarters of borrowing to purchase BTL properties in the next year will be made through limited companies rather than through private individual applications.
Simon Bayley, commercial director of Foundation Home Loans, has told FT Advisor that: “I expect over the coming year purchase buy-to-let lending could be north of 75 per cent going through an limited liability company structure.”
Yesterday Letting Agent Today reported that specialist BTL broker Mortgages for Business claimed some 30 per cent of buy to let borrowing in the first half of 2016 was undertaken through limited companies - up from just 18 per cent in the first half of 2015.
Bayley says that “if the plan is to own the property for a long time and the focus is asset growth, then it would generally be worth transferring into a LLC structure, which can be looked at with a simple calculation to give a good indication as to what would work best for a landlord’s specific circumstances.”
But he says landlords need to calculate carefully whether the costs of setting up a limited company, as well as the costs of new investment properties within that structure, would be economically viable.