The rental market has become increasingly challenging over recent years, particularly for private landlords. Rising buy-to-let mortgage costs, dwindling tax relief and tightening regulations have left many wondering how to successfully adapt to this new environment.
Although rental demand remains high, the impact of falling house prices, higher costs and changes to Capital Gains Tax (CGT) means the only answer for some landlords is to sell up and leave the market. For others, the solution may be to set up a limited company, an option that has grown in popularity over recent years. According to estate agent Hamptons, the number of landlords operating as limited companies has doubled since 2017 – there are now 300,000 property companies in the UK, up from 89,757 in 2017. We estimate that 90%/most of all buy-to-let applications we receive are now from limited companies.
This increase, driven mainly by fiscal and regulatory pressures, also reflects the Government’s desire for the buy to let market to become professional. Managing a rental portfolio as a limited company may help some landlords to achieve this.
It’s important to research and understand the factors involved in setting up a limited company before making a final decision. Here, we look at some of the main points to consider.
As you can see, there are many factors to consider, so seeking financial and legal advice is essential before making your decision. But whether you choose to operate as a limited company or private landlord, those who can ride the wave of rising costs, comply with increasing regulations and work to professional standards, will be in a strong position to take advantage of the continued demand for high-quality rental properties in the future.
If you’re thinking about setting up a limited company structure to manage your property portfolio, speak to our experienced advisers at Vincent Burch Mortgage Services. We can advise you on the best finance options available and discuss the implications for your investment now and in the future. Our whole-of-market approach means we have access to lenders who are not on the high street, offering bespoke limited company buy-to-let mortgages at competitive rates.
As a whole-of-market intermediary, our expert team at Vincent Burch Mortgage Services has access to all specialist lenders offering Limited Company mortgages. We’ll work together to understand your individual requirements and find the best mortgage for your plans. With extensive experience, we are well-placed to guide you through the process and pride ourselves on helping customers make the most of their investment.
Advice that’s tailored to your own bespoke situation.
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