There’s been a significant rise in the number of limited company mortgage applications, a trend which is claimed suggests that up to 40% of buy-to-let loans may be requested using limited companies by the end of 2016.

Buy to Let Club, which claims to be a market leader and innovator in the buy to let sector, says it has detected a sharp increase in the number of buy-to-let loans that are being applied for via limited companies.

This trend it says, “aligns with industry predictions that suggest that almost 40% of buy-to-let loans could be via limited companies by the end of 2016 (data from Kent Reliance)”.

Landlords are being forced to consider this direction following changes to tax relief on mortgages that will start to come into force on a sliding scale over four years, from next year.

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However, some experts have warned that there are pros and cons with incorporation and the benefits will depend on specific circumstances, so landlords should seek a property tax specialist’s advice.

Ying Tan, managing director of Buy to Let Club, has said:

“We saw an unusually high number of limited company applications in June this year totalling 22% of our packaged cases and July has proved to be another strong month.

“We are seeing limited company rates falling as competition in the market heats up in preparation for the tax changes in 2017 and landlords are clearly taking advantage of this.”

Despite some difficulties obtaining mortgages through a company, the Buy to Let Club say they have secured a limited company mortgage with Precise Mortgages offering a 3-year fixed rate of 3.54% until 31 October 2019.

Maximum LTV with this product is 75%, and an arrangement fee of 1.50% applies. Early repayment charges they say are 3% until 31 October 2017, followed by 2% in the following 2-years, and the revert rate is LIBOR plus 4.42%.

Alan Cleary, managing director of Precise Mortgages, says:

“We work closely with Buy to Let Club in mortgage product design and this type of product is growing in popularity and I expect it to be a popular choice amongst brokers and landlords.”


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