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Rising proportion of BTL mortgages using a limited company

Limited company transactions as a proportion of all Buy to Let (BTL) mortgage transactions have been rising since a reduction in tax breaks for landlords was announced in July 2015. This is because they can offer greater tax and financial efficiencies.

Other fiscal and regulatory pressures have also been driving professional landlords (4+ properties) to use a limited company. They include the additional 3% Stamp Duty Land Tax on rental homes, plus changes to wear and tear relief (April 2016) and the more recent cuts to mortgage relief (April 2017–2020).

The number of landlords buying through a limited company using Mortgage for Business stood at 47% in the first quarter (Q1) of 2018, up from 18% in the first half (H1) of 2015, but has appeared to have stabilised. Another mortgage broker, Precise Mortgages has seen 38% of landlords use limited companies so far this year.

BTL mortgages account for 14% of all residential lending according to UK Finance. Mortgage for Business estimated that in 2017, 10% of BTL mortgages were conducted using limited companies and they anticipate that will rise to 29% in 2019.

Note: There is no definitive dataset on the volumes of landlords buying through limited companies

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