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MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Published: 22/05/2017

The buy-to-let (BTL) market has come under increased scrutiny in recent years, and landlords have been hit by several tax changes as a result. Tax reliefs are being cut and profitability is being compromised, which means landlords are looking at their options – and many are considering setting up their own limited company instead.

Luckily for them, our latest research shows that the proportion of buy-to-let mortgages available to limited companies has doubled in just one year, so incorporating appears to be an increasingly viable option. Indeed, there are now 313 such deals available, representing 20% of the entire BTL mortgage market – up from 10% a year ago – which means limited company landlords have never been better served.

5 years ago
A year go 6 months ago Today
Number of limited company products 30 133 201 313
Overall percentage of the BTL market 5% 10% 13% 20%
Source: Compiled 22.05.17

"It feels like the BTL market has been hit from all angles recently, and this has left landlords feeling vulnerable and wondering whether it is still worth continuing in the BTL sector," said Charlotte Nelson, finance expert at "This has resulted in a shift in focus to limited companies, away from individual ownership, which is influencing not just landlords but also providers offering BTL mortgages.

"As the reality of April's tax changes starts to bite, the proportion of deals available to limited companies has grown dramatically, having increased by 7% in just six months. With the extra pressure in the BTL market and the added interest in limited companies, it is no surprise that lenders have leapt into action and started offering more deals to limited companies."

However, it isn't all good news. Our figures show that, despite the boost in product numbers, landlords considering this type of mortgage could find themselves on a more expensive deal than the rest of the BTL market; for example, the average two-year fixed rate BTL mortgage for those applying as a limited company currently stands at 4.22%, whereas the average two-year fixed rate for the rest of the market is significantly less at just 2.97%.

This means that, "with all the extra legwork a limited company option entails, any borrowers considering it should consult a financial adviser to ensure it is the right route for them," said Charlotte, as incorporating may not be for everyone. Start by comparing buy-to-let mortgages so you get an idea of the financial pressures you could be dealing with, and consult our mortgage adviser partners to see if incorporating could be worth considering.


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