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Limited company lending and the role of the mortgage intermediary

09 Jun 2023

The data reveals that two-thirds of landlords arranged their most recent BTL mortgage via a mortgage intermediary – discover who needs your help

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Whether your clients choose to invest in buy-to-let properties in their own name or through a limited company, the market is becoming ever more competitive and more complex. And this is a combination which only serves to highlight the value of the advice process and the opportunities on offer for proactive intermediaries across the BTL arena.

This was apparent in the Q1 2023 BVA BDRC Landlord Panel research – in conjunction with Foundation Home Loans – which found that over two-thirds (68%) of landlords arranged their most recent BTL mortgage via a mortgage intermediary. 17% were reported to arrange their borrowing directly with a lender (without lender advice), 7% directly through a lender (complete with lender advice), 2% via an online broker or robo-advice platform and 1% via a comparison site. In addition, 3% or respondents said ‘other’ and 2% were unsure.

Breaking this down a little, landlords with 11+ properties were most likely to arrange their mortgage through a mortgage intermediary (at 78%) followed by landlords with portfolios of 20+ properties (72%). The least likely were landlords with 1 property at 55%. 

This is a new question on the report and we will certainly be monitoring any further trends moving forward.

When it comes to limited company activity, the number of landlords looking to buy their next property within such a structure was reported to be back up to the recent high of Q2 2022. The Q1 research showed that over 6 in 10 landlords intend to buy their next property within a limited company structure with 24% of landlords planning to purchase as an individual (down by 5% since last quarter).

Those with larger portfolios are significantly more likely to purchase in a limited company structure (64% of 6+ property landlords versus 36% of those with 1 – 5 properties).  In addition, 75% of a limited company landlord’s portfolio is held within a company structure, up by 14% since Q4. This is said to be driven by the average number of properties held in a limited company increasing by 2.6 properties in Q1 2023 vs. Q4 2022 

This data shows that a growing number of landlords are realising the benefits attached to limited companies. The good news is that lenders such as Foundation Home Loans, who are specialists in this type of lending, are on hand to help intermediary partners to successfully deliver these benefits to their landlord clients.

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