Ltd companies borrow more than landlords for first time

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Limited company borrowing outstripped individual landlord borrowing for the first time in Q2 this year, according to Mortgages for Business.

The firm says more than half the value of buy-to-let lending in the second quarter went to limited companies.

Of buy-to-let purchase completions this quarter, 73 per cent were performed by limited companies, up more than 10 per cent from 62 per cent in Q1.

Limited companies accounted for 76 per cent of buy-to-let lending by volume, up from 63 per cent in Q1.

This rise was driven by high volumes of purchase applications from limited companies. These made up 77 per cent of buy-to-let purchase applications in Q1 and 78 per cent in Q2.

Mortgages for Business bases its findings on its latest Limited Company Buy to Let Index, which analyses lending transactions brokered by the firm.

Mortgages for Business chief operating officer Steve Olejnik says: “Landlords are increasingly looking to limited company structures because of the benefits they bring in the form of tax efficiencies and softer affordability testing.

“The structures are not without their hurdles, however, and we recommend all our clients take professional tax advice before deciding how to proceed.”