More buy-to-let landlords switching to limited companies

 

As landlords continue to look for ways to beat the latest raft of tax changes and stricter lending rules, purchasing buy-to-let properties through a limited company is growing in popularity.

Setting up a limited company through which to buy and operate buy-to-let properties is now on the cards for 38% of landlords over the coming year, according to research by Precise Mortgages which polled members of the National Landlords Association (NLA).

For those landlords with portfolios containing four or more properties, 42% intend to operate through a limited company in the year ahead, compared to 31% of those with up to three properties – and presumably those with just one property, including “accidental landlords“, will be the least likely to benefit from setting up a limited company.

Beating the tax hike

With the Section 24 tax changes now being phased in for landlords, which means that less of their mortgage interest payments can be offset against their tax bill, as well as the Prudential Regulation Authority (PRA) introducing stricter lending criteria for portfolio landlords seeking mortgages, switching to a limited company can have many advantages.
[crb_image link=”https://www.buyassociation.co.uk/advice/property-investment-starter-course/” image=”https://cdn2.hubspot.net/hubfs/1717782/Asset_Store/WebCTA/cta.jpg” align=”left”]
Daniel Bailey, principal at Derbyshire-based Middleton Finance, said: “If a client is looking to buy more than three or four properties, the majority of clients are purchasing property though a limited company.

“It is important to get tax advice from a tax expert as each client’s circumstances are different. Limited companies offer a lot more flexibility and are proving to be popular with landlords who are looking to start or increase their portfolio.”

According to the research, 15% of landlords are planning to increase their portfolios over the next 12 months, buying an average of two additional properties, while 23% intend to make three or more new investments. The Precise Mortgages poll shows that 89% of brokers expect to see a rise in the number of landlords setting up as limited companies in order to continue to claim tax relief in mortgage interest payments.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

More buy-to-let landlords switching to limited companies

More buy-to-let landlords switching to limited companies

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.