Over half the value of buy-to-let lending in the second quarter went to limited companies, according Mortgages for Business.
The broker said that limited companies borrowed more in the second quarter than individual landlords for the first time ever, including both purchase and remortgage transactions.
Of buy-to-let purchase completions this quarter, 73% were performed by limited companies, up from 62% in the first quarter.
Limited companies accounted for 76% of buy-to-let lending by volume, up from 63% in the first quarter.
This has been caused by high volumes of purchase applications from limited companies, making up 77% of buy-to-let purchase applications in the first quarter and 78% in the second quarter.
Steve Olejnik, COO of Mortgages for Business, said: “Landlords are increasingly looking to limited company structures because of the benefits they bring in the form of tax efficiencies and softer affordability testing.
“The structures are not without their hurdles, however, and we recommend all our clients take professional tax advice before deciding how to proceed.”
John Eastgate, sales and marketing director of OneSavings Bank, said: “The changes to mortgage tax relief have only added to landlords’ growing tax burden and the buy to let sector has seen a definitive shift towards limited company lending, with 24% of investors considering incorporating or transferring property to spouses.
“Against a backdrop of political and economic uncertainty, investors’ confidence has also been knocked by weakening house price growth and new lending restrictions which will fundamentally alter the mix of landlords. We are already seeing signs of amateur landlords leaving the market, paving the way for committed landlords, which will lead to greater stability and professionalisation of the sector.”
The figures are based on its Limited Company Buy to Let Index which tracks lending activity broke red by the firm.
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