Rise in limited company buy-to-let mortgage applications

A rising number of buy-to-let landlords are beginning to apply for mortgages via limited companies, according to new data.

The Buy to Let Club has recorded a rise in limited company applications during June, with the trend continuing during July.

Trends

This increase backs up other data that shows similar patterns in the market. A number of landlords are incorporating as a result of the increase in stamp duty and changes in mortgage interest tax relief, coming into force in 2017.

Mortgages for Business have stated that both applications and completions for limited company lenders has stabilised at one-third of the total of buy-to-let business.

Ying Tan, managing director of Buy to Let Club 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.’[1]

Rise in limited company buy-to-let mortgage applications

Exclusive product

As a result of the rise, Precise Mortgages has launched an exclusive limited company buy-to-let three-year fixed rate mortgage product through the Buy to Let Club.

This product is fixed at 3.54% until 31 October 2019 up to 75% LTV. It comes with an arrangement fee of 1.5%, while early repayment fees are 3% until 31^st October 2017, followed by 2% for the next two years.

Alan Cleary, managing director at Precise Mortgages, observed, ‘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.’[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/sharp-rise-in-limited-company-applications-from-buy-to-let-landlords