MoneyFacts: buy-to-let mortgages for limited companies doubled in the last year

The number of buy-to-let mortgage deals available to landlords who operate their properties through limited companies has doubled in the last year.

Over 300 mortgage options for buy-to-let landlords

New research from MoneyFacts suggests that there are now 313 separate deals available for landlords, compared with 133 this time last year, and 201 six months ago.

The share of the total buy-to-let mortgage market that these loans represent is also rising, with 20 per cent of all loans available to landlords running limited companies. This is compared with 10 per cent a year ago, and just five per cent five years ago.

Some landlords have opted for the limited company structure in order to mitigate the impact of April’s changes to the tax regime.

From the start of this tax year, landlords are no longer able to offset the full cost of their mortgage interest payments against tax. It is thought that the limited company structure may reduce losses incurred as a result in some cases.

Landlords are ‘feeling vulnerable’

MoneyFacts spokesperson Charlotte Nelson said: “It feels like the BTL market has been hit from all angles recently, and this has left landlords feeling vulnerable and wondering whether it is still worth continuing in the BTL sector.”

This has resulted in a shift in focus to limited companies as opposed to individual ownership, which, accrding to Nelson, is influencing not just landlords but also providers offering BTL mortgages.

“As the reality of April’s tax changes starts to bite, the proportion of deals available to limited companies has grown dramatically, having increased by 7% in just six months,” she added, “With the extra pressure in the BTL market and the added interest in limited companies, it is no surprise that lenders have leapt into action and started offering more deals to limited companies.”

Are you considering using a limited company for your properties? Let us know in the comments.

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