Professional Landlord Numbers on the Rise

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Professional landlord numbers are continuing to rise, as 38 per cent of landlords will use limited companies to buy properties in the next year, dwarfing the 28 per cent who will purchase as individuals.

According to new analysis from Precise Mortgages, the number of landlords with more than four properties who are purchasing via a limited company rose to 42 per cent. However, the number dropped to 31 per cent for those with up to three properties. 

London landlords are most likely to be making the shift to professional landlord status by planning to purchase through a limited company. 

Managing director of Precise Mortgages, Alan Cleary, said: ‘Buying property within a limited company structure has become increasingly popular, particularly among larger professional landlords. Given the predicted rise in landlords switching to limited company status this year, we can expect this trend to continue. The contrasting levels of awareness of the PRA’s recent changes to lending criteria and the application process between small and larger portfolio landlords points to the growing professionalisation of the latter group who stand to be the most affected.’ Precise Mortgages is currently one of the most recommended specialist mortgage lenders, helping landlords to find solutions and supporting them through the process.’

89 per cent of brokers expected the number of landlords setting up as limited companies to rise. This is likely fueled by the ability to continue to claim tax relief on mortgage interest as a professional landlord. 

Of those surveyed, 15 per cent of landlords planned to add to their portfolios in the coming year, adding an average of two new properties, according to the BDRC survey. Of those, 23 per cent are planning to add three or more properties.

Landlords with larger portfolios are more aware of the Prudential Regulation Authority (PRA)’s lending criteria and portfolio application process changes. Worryingly, just 45 per cent of all landlords are aware of PRA changes. This rises to 67 per cent among landlords who own four or more buy to let mortgages. 

However, 74 per cent of landlords with larger portfolios perceived that the changes have made it more difficult to secure buy to let finance.

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