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Buy to Let Investors Turning to Limited Companies

Almost two-thirds of landlords plan to expand their property portfolio by buying through a limited company

A third of landlords are planning to remortgage at least one property in their portfolio in the next 12 months

Property investors looking to add to their portfolio are more likely to purchase through a limited company, according to a quarterly survey of landlords by Foundation Home Loans.

Nearly two-thirds (63%) of buy-to-let landlords responding to the specialist lender’s poll said they were planning to buy their next rental property in a limited company over the next 12 months.

This is an 8% increase on the results of the previous survey in Q2, with the report also finding that purchases through limited companies are increasingly becoming the preferred option for landlords with a broad range of portfolios.

Historically, investors with buy-to-let portfolios spanning at least 11 properties are the most likely cohort to purchase through a limited company, but the research reveals that landlords with smaller portfolios are also considering using them.

65% of landlords with 11+ property portfolios said their strategy was to use a limited company, whilst 62% of small portfolio investors of up to 10 properties said the same.

In addition, almost a third (31%) of landlords said they are planning to remortgage at least one of their properties in the next year.

Jeff Knight, Marketing Director of Foundation Home Loans, commented: “The rise in limited company usage by landlords shows no sign of tailing off, particularly as we have a more professional landlord community who recognise the benefits of using such a vehicle.”

Earlier in the week, the Residential Landlords Association (RLA) warned that buy-to-let investors have to comply with over 150 regulations and legislations, but that this has not resulted in better action against criminal landlords.

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