There’s been another large increase in the number of buy to let mortgages sought by limited companies - they accounted for nearly four in every five in the most recent quarter of the year says Mortgages for Business.
This represents 79 per cent by value of completing buy to let purchases, up from 73 per cent in the second quarter.
Now companies are getting into remortgaging too: when the firm looks at its entire actity (handling applications for buy to let purchases and remortgaging by existing clients) limited company transactions constituted 48 per cent of completions in Q3 by number of mortgages, and 47 per cent by value of lending.
The increase in the use of limited companies by landlords for their borrowing needs is also reflected in the statistics held by Companies House which show that there was a spike in registrations for Special Purpose Vehicle limited companies in 2016 following the 2015 Summer Budget when the then-Chancellor announced changes to income tax relief on finance costs for landlords borrowing personally.
“There was, unsurprisingly, a spike in SPV registrations last year, but it looks like the numbers have been increasing for considerably longer than might be expected. Looking at historic registrations, numbers have been on the rise ever since 2008” says Steve Olejnik, chief operating officer at Mortgages for Business.
“That said, the 2015 Summer Budget has noticeably sped things up, with 2015 and 2016 showing the strongest growth in registrations in the sample, whether proportionally or in absolute terms. Over 20,000 new SPVs were registered in the year so far compared to circa 13,000 in 2014 – scaling up suggests a figure somewhere just shy of 35,000 by the end of the year, an increase of about 35 per cent over 2016.”