Two thirds of landlords plan to use specialist purchase vehicles (SPVs) for future buy-to-let property purchases, according to Paragon Bank.

A survey of more than 500 landlords reveals that 63% expect to make future property purchases through SPVs. This is an average across all age groups, with Paragon’s analysis highlighting how the propensity for limited company purchase is highest amongst the youngest cohort and decreases with age.

Every survey respondent aged 25-34 intends to use limited companies for future acquisitions, compared to eight in ten (82%) landlords in the 35-44 age group and almost three quarters (73%) of those aged 45-54. Approximately half of landlords - 54% and 48% - in the 55-64 and 65-75 age groups - plan to use SPVs for buy-to-let property purchases in future.

Transfer

The survey also reveals that a third of landlords (32%) intend to transfer properties held in personal name into a limited company structure in the future. Paragon predicts that the increase is likely to continue, spearheaded by younger and newer landlords.

Louisa Sedgwick, managing director of mortgages, says the growing trend during the last decade has been driven by changes in taxation.  

“Nearly two thirds of landlords intend to make future purchases through limited companies, so we expect the overall proportion of property held within a company structure to increase steadily in the coming years, particularly when you include those landlords who will incorporate existing property from personal name,” she explains.

“It’s encouraging to see that they will continue to adapt in this way, particularly the next generation of landlords who seem to have realised the potential benefits of this ownership structure early in their lettings business careers.”

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