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Rise in landlords incorporating their business
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
A specialist buy-to-let mortgage firm has observed that lending to landlords that have set up limited companies has risen substantially in the first quarter of the year.
Data from Kent Reliance’s Buy To Let Britain report, shows that 38,000 landlords set up as private limited companies were lent to in Q1 of 2016. This was more than the total lending figure in the whole of 2015.
Rise in lending to limited companies
Further data from the report indicates that the number of loans to private limited companies will increase to around 100,000 by the end of 2016.
Many landlords have chosen to incorporate following the 3% additional Stamp Duty land tax that came into force on April 1st. Borrowing through a limited company sees investors taxed at lower corporation rates. What’s more, they are able to offset financial costs against rental income.
Kent Reliance also said that rents are increasing, as landlords look to offset their increased bills. According to the lender, 40% of landlords believe rents will increase during the next 6 months, by an average of 5.6%.
Rise in landlords incorporating their business
Blame game
Almost three-quarters of landlords who are looking to increase their rents blame the reduction in mortgage interest tax relief, which will come into force next year.
Separate research from the Council of Mortgage Lenders shows that the total value of rent collected by buy-to-let landlords in Britain over the last year was £53bn. This was a rise of around 10% from one year previously.
