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Limited company – capitalising on potential opportunities

13 Feb 2023

As portfolios professionalise, how many landlords plan to buy in an SPV/limited company this year? Our latest survey data revealed. 

Limited Companies

The enforcement of stamp duty surcharges and mortgage tax relief withdrawals have further complicated matters for landlords in recent years and this is especially apparent when it comes to optimising financials and maximising tax efficiencies.

This has resulted in landlords with differing portfolio sizes having to carefully evaluate the performance and costs attached to individual properties and whole portfolios, a factor which is especially apparent in what remains a tough economic climate.

Such evaluations have already led to growing numbers of landlords turning to limited company structures to enhance and protect the performance of their investments, especially those landlords with larger portfolios. Numbers which are likely to rise further in 2023.

The latest landlord research from Foundation Home Loans – in conjunction with BVA BDRC – showed that 57% of landlords intend to buy their next property in a limited company structure, versus 29% planning to buy as an individual.

Landlords with larger portfolios are significantly more likely to purchase in a limited company structure, with 55% of 6+ property landlords looking to buy in this way compared to 45% of those with 1 – 5 properties.

Breaking down this data, the average portfolio size for those with at least one property in a limited company was suggested to be 14.9 properties, with landlords letting an average of 9.1 properties as a limited company. In addition, almost a third (61%) of a limited company landlord’s portfolio is held in a limited company structure, meaning 39% is not incorporated.

This final statistic represents an interesting one for the intermediary market as it demonstrates the breadth of opportunities to engage with landlords who have yet to incorporate elements or all of their portfolios. And working closely with lenders who deliver transparent products, consistent lending decisions, excellent customer service and limited company lending expertise in their propositions will help intermediaries to capitalise on these potential opportunities.

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