Almost four-fifths (79%) of buy-to-let purchases by value made via Mortgages for Business in Q3 2017 were by limited companies, according to a recent report
The latest edition of the Limited Company Buy to Let Index has found that limited company transactions (for purchases and remortgages) made up 48% of buy-to-let completions in Q3 by volume, and 47% by value of lending.
Steve Olejnik, COO at Mortgages for Business, said: “There was, unsurprisingly, a spike in SPV [special purpose vehicle] registrations last year, but it looks like the numbers have been increasing for considerably longer than might be expected.
“Looking at historic registrations, numbers have been on the rise ever since 2008 which, I’m sure you can guess, was not a popular year to start a property company.
“That said, the 2015 Summer Budget has noticeably sped things up, with 2015 and 2016 showing the strongest growth in registrations in the sample, whether proportionally or in absolute terms.
“Over 20,000 new SPVs were registered in the year so far, compared to [circa] 13,000 in 2014.”
Mortgages for Business has found that scaling up these results produced a figure close to 35,000 by the end of the year, an increase of around 35% over 2016.
“Landlords are turning to SPVs because of the benefits they bring in the form of tax efficiencies and softer affordability testing.
“Switching to corporate structures is not without risk, however, and we recommend all our clients take professional tax and finance advice before deciding how to proceed.”
