Majority of landlords now hold properties in a limited company

A greater number of ‘portfolio landlords’ are now holding their properties in limited companies as the tax relief changes take hold. 

New data from Kent Reliance reveals that the number of landlords applying for buy-to-let mortgages for limited companies increased in 2017 when compared with the previous year by 45%.  

As the tax relief reductions continue over the next few years, it is likely that more landlords will want to switch to limited company structures.  

The various tax and regulation changes introduced in recent years which affect the buy-to-let market have also changed the make-up of the sector.

Research carried out by Kent Reliance shows that professional landlords with larger, more established portfolios have been more likely to acquire a new property over the last three months than landlords with five or fewer properties. So, landlords with smaller portfolios have been less inclined to invest further in the market.  

As the majority of landlords in the sector have only one property, and it is these landlords who have proved less likely to invest further, this is having an impact on the growth of the sector.  

Andy Golding, Chief Executive at OneSavings Bank, part of Kent Reliance, said: “Landlords are swallowing the unpleasant cocktail of higher taxation and tighter regulation, and this is undermining the expansion of the private rented sector”.  

He continued: “Creating a more professional sector is no bad thing, but there is a limit to the amount of change the sector can absorb before we see a damaging reduction in supply – an outcome that would see rents increase for tenants and reduce their ability to save for a deposit for house purchase.”  

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Moneywise