Ltd company BTL applications soared in Q4 2016: Mortgages for Business

Buy-to-let applications made through limited companies surged at the end of the year, according to data from Mortgages for Business.

The firm’s Limited Company Buy to Let Index shows that 69 per cent of total purchase applications made in Q4 2016 were made through limited companies, up 6 per cent on Q3.

This is substantially higher than the 21 per cent recorded before the changes to tax relief on mortgage interest were unveiled by former chancellor George Osborne in July 2015.


(Pictured: David Whittaker)

The increased use of limited company structures includes both new purchases and ‘transfers’ where landlords sell their existing properties to a limited company.

The proportion of remortgage applications made through limited companies rose from 23 per cent in Q3 to 31 per cent in Q4.

Mortgages for Business says this suggests greater numbers of investors are transferring their properties into limited company names. This then cuts the proportion of remortgaging applications made by individuals.

But the index also shows that the choice available to limited company landlords remained flat despite the increased interest in the option.

Between Q3 and Q4 2016 the number of lenders offering products to limited companies stayed at 14.

Meanwhile, the number of buy-to-let products available to limited companies increased slightly from 195 in Q3 to 198 in Q4.

The proportion of products available to landlords using a limited company as a total of all buy-to-let products remained at 16 per cent.

Mortgages for Business managing director David Whittaker says: “The sharp increase in purchase applications made by landlords using a limited company structure is unsurprising given the financial incentive to do so, and it is encouraging to see growing numbers of landlords approaching their investments intelligently. With the changes to tax relief set to be phased in from April 2017, this trend is unlikely to be reversed any time soon.

“Although many mainstream lenders do not yet have an offering for investors using limited companies, many smaller lenders have significant expertise when it comes to servicing this part of the market.”