The proportion of homes let through a limited company reached an all-time high of 20% in the first quarter of the year, new figures show.
The phasing out of mortgage tax relief between now and 2020 is encouraging more landlords to own their buy-to-let portfolios through a company rather than hold as a personal asset, which largely explains why there was a 6% rise in the proportion of homes let by a company landlord in Q1 2017 compared with the corresponding period last year.
The data, provided by Countrywide, suggests that landlords letting homes in London are most likely to own their property using a company name, with 27% of properties let in the capital owned by a company, a larger proportion than anywhere else in the country.
Johnny Morris, research director at Countrywide, said: “The number of rented homes owned through a company is on the up. The incoming tapering of mortgage tax relief is likely driving the increase.
“Companies are generally taxed more favourably, particularly with recent changes by government to tax relief, so in many cases landlords can make cash savings by operating through a company rather than as an individual.”
According to Countrywide, rents fell last month, with the cost of a new let falling by 0.3% compared with March 2016, the second consecutive monthly fall.
The average rent of a new let in Britain fell to £928 per calendar month, down £3 year-on-year, fuelled by London, the South West and Wales where rents dropped by 0.4%, 0.2% and 6% respectively.
Morris added: “Rents fell again in March, mostly driven by falls in London. Stock growth continues to outpace demand in the capital, giving tenants more negotiating power, pushing down rents. In much of the rest of the UK rents continued to grow, although at a slower rate.”
Proportion of homes let by a company landlord
Year
|
% of homes let by a company landlord
|
2010
|
19%
|
2011
|
17%
|
2012
|
15%
|
2013
|
11%
|
2014
|
12%
|
2015
|
14%
|
2016
|
14%
|
2017
|
20%
|
Proportion of homes let by a company landlord by region - January 2016 – March 2017
Region
|
|
London
|
27%
|
Yorkshire and the Humber
|
17%
|
East of England
|
12%
|
East Midlands
|
12%
|
South East England
|
12%
|
South West England
|
10%
|
North East England
|
8%
|
West Midlands
|
7%
|
North West England
|
6%
|
Scotland
|
4%
|
Wales
|
3%
|
Proportion of lets by price band - January 2016 – March 2017
Rent
|
Company landlords
|
Non-company landlords
|
<£500 PCM
|
25%
|
12%
|
£500-£1000 PCM
|
47%
|
59%
|
£1000-£1500 PCM
|
17%
|
19%
|
£1500-£2000 PCM
|
9%
|
6%
|
£2000+ PCM
|
3%
|
3%
|
New lets
Region
|
Ave Rent Mar-17
|
Ave Rent Feb-17
|
Ave Rent Mar-16
|
March Rent YOY
|
Greater London
|
£1,289
|
£1,246
|
£1,294
|
(0.4%)
|
Central London
|
£2,318
|
£2,359
|
£2,562
|
(9.5%)
|
East of England
|
£991
|
£974
|
£974
|
1.8%
|
South East
|
£1,170
|
£1,152
|
£1,157
|
1.2%
|
South West
|
£813
|
£825
|
£814
|
(0.2%)
|
Midlands
|
£671
|
£669
|
£664
|
1.0%
|
North
|
£658
|
£667
|
£657
|
0.3%
|
Scotland
|
£677
|
£668
|
£651
|
4.0%
|
Wales
|
£645
|
£670
|
£687
|
(6.0%)
|
Total
|
£928
|
£921
|
£931
|
(0.3%)
|
Source: Countrywide
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