The latest landlord research from Foundation Home Loans, the intermediary-only, specialist lender has revealed that a third of all landlords intend to remortgage over the course of the next 12 months, with larger, portfolio landlords much more likely to do so within a limited company.
When asked how they intended to remortgage, 53% said they would do so as an individual, 19% said they would do so within a limited company, while 17% said it would depend on their circumstances at the time. However, those landlords with larger portfolios – 11-plus properties – were much more likely to remortgage within a limited company structure, with over a quarter (26%) saying they would do so within the next year.
Foundation says that the research – undertaken by BVA BDRC and carried out in June 2019 with the results based on 738 online interviews – continues to show that larger landlords in particular are keen to utilise the full tax relief advantages of holding properties within a limited company, and that this will naturally lead to greater levels of remortgaging within such structures.
Foundation said it had also seen a considerable rise in the number of landlords remortgaging within limited companies and it anticipates that landlords who hold properties in their individual names may also seek to move them into a corporate vehicle at some point in the future.
Jeff Knight, Director of Marketing at Foundation Home Loans, said: “Understandably when it comes to remortgaging there is a continued shift towards the use of limited company vehicles particularly as we see the growth in portfolio and professional landlords who understand the advantages of holding their properties within such corporate structures. The ability to secure full mortgage interest tax relief, which is not available when holding properties as an individual, is a clear incentive for the move towards limited company borrowing.
“As a lender we’ve certainly seen a shift towards limited company business and our aim is to offer a competitive product offering, clear criteria and a smooth service for those landlords seeking to remortgage. It’s also clear that remortgaging remains the bedrock of the buy-to-let market and, because of that, advisers should be making regular contact with their existing clients in order to ensure they secure that repeat business, and they take advantage of the highly-competitive market that exists.”
Foundation’s range of buy-to-let products for those who are purchasing or refinancing through a limited company is currently available up to 80% LTV, is offered at an ICR of 125 times the pay rate for five-year fixed rates, has no maximum age, accepts newly-incorporated limited companies, and has a maximum loan size of £1.5m.