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Ltd Co takes 40% of specialist BTL market – MFB

  • 04/04/2017
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Ltd Co takes 40% of specialist BTL market – MFB
Limited company purchases and remortgages now make up 40% of the buy-to-let (BTL) market, according to Mortgages for Business.

According to data from the broker, Q1 2017 saw limited companies represent 40% of all completions, up from just 29% in Q4 2016.

The first three months of the year also saw BTL limited company applications increase to 77% of all applications – up from 69% in the last three months of 2016.

Data for the index is taken from Mortgages for Business BTL mortgage product sourcing software and from its own transaction data. Lenders with bespoke offerings, including high street banks, including TMW and BM solutions and the commercial arms of the challenger banks have been excluded from the data set.

There is no whole of market data regarding buy-to-let through limited companies at present, however from Q3 the Bank of England will begin measuring the sector.

These applications totalled just 21% in the quarter before the 2015 Summer Budget when the tax relief changes were announced – signalling a near reversal of the situation since that time.



Last month the Mortgage Solutions poll found that just one in five brokers were automatically offering borrowers a personal and limited company illustration for BTL applications.


More products

Mortgages for Business said the range and pricing of buy to let mortgage products for limited companies was continuing to improve as the average number of products available to limited company borrowers increased by more than a third to 266, with fixed rates cut across all terms.

It also noted that the average three-year fixed rate loan was just 0.5% higher than equivalent products available in the wider market.

“Lenders are offering unprecedented choice to limited company borrowers despite a drop in BTL product numbers overall,” it said.


Larger loans

Limited company borrowers also continue to take larger average loans, taking advantage of lower interest cover ratios to increase the capital they can raise.

Mortgages for Business CEO David Whittaker (pictured) said: “With the changing face of the buy to let mortgage market, it is no surprise that lenders are keen to appeal to limited company borrowers.

“We have been recommending for some time that our clients seek professional tax advice to determine whether incorporation is the most suitable route for their circumstances, and these figures can only further encourage landlords to consider their position.”

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