New figures from Foundation Home Loans show that almost two-thirds of landlords will be purchasing through a limited company. This quarter three result is a big increase from the 55% who were intending to buy in this way in quarter two of 2019. This new level reflects the findings of research carried out in September 2019, involving 888 participating landlords.
Limited companies are now the preferred purchase vehicle for landlords with any size of property portfolio. Previously, this method was primarily used by landlords with more than ten properties. In September 2019, 62% of those with 1-10 properties said they would purchase via a limited company next, while 65% of those with 11-plus properties said the same thing. The other significant purchase method was as an individual (26% of landlords).
When purchasing a rental property, 73% of landlords use a mortgage adviser and 19% go direct to a lender. This pattern remains unchanged despite the significant move towards buying through a limited company. Landlords planning to remortgage in the next year (31%) prefer to use a mortgage adviser (65%) whereas 23% would go direct to a lender.
Jeff Knight of Foundation Home Loans told Property reporter: “The rise in limited company usage by landlords shows no sign of tailing off, particularly as we have a more professional landlord community who recognise the benefits of using such a vehicle. It’s therefore perhaps no surprise to see a growing number of landlords signalling their intention to make their next purchase through a limited company.”
He added: “It’s quite apparent where the market has moved to and the growing need for limited company expertise.”
Are you a landlord in north London?
Maybe you’re planning to invest in rental property?
“There are some fantastic opportunities in the local market,” says Jason Dyer of JTM Homes. “The rental market in north London is strong and we have lots of potential tenants who are looking to rent in the area.”
To find out more, contact the lettings team at JTM Homes. Enjoy a no-obligation discussion and find out what the north London lettings market can offer you.