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Buy-to-let product numbers for limited companies double in last year

The number of buy-to-let mortgage deals available to landlords who operate their properties through limited companies has more than doubled in the last year, new figures show.

According to Mortgages for Business’ Buy to Let Index, the total number of mortgage products available to landlords borrowing via a limited company averaged at 628 during the third quarter of 2018, up from an average of 263 in the corresponding quarter last year, thanks to a rise in the volume of buy-to-let lenders lending to limited companies.

In Q3 2018, there were 22 BTL lenders lending to limited companies, up 47% on the 15 lenders operating in the market in Q3 2017.


New lenders include West Bromwich Building Society, Magellan Homeloans and a lender which is currently running an exclusive pilot with Mortgages for Business.

The rise in the number of mortgage products available to landlords borrowing via a limited company reflects the fact that significantly more BTL purchases are now being made via a corporate vehicle, as landlords respond to the government’s tax changes, including the phasing out of mortgage interest tax relief.

The index revealed that 44% of all BTL purchases were made via a corporate vehicle in Q3 ‘18, from 42% in Q2 ‘18.

Steve Olejnik, managing director at Mortgages for Business, said: “It has been encouraging to see so many new entrants to the specialist end of the buy-to-let market in the last quarter, putting product availability at an all-time high.

“This just goes to show there is still a lucrative, buoyant market out there following on from the recent regulatory changes.”

In the wider buy-to-let mortgage market, an average of 1,571 products were available in Q3 ‘18, up from an average of 1,547 in Q2 ’18.

Remortgaging continued to dominate the market, with just one-third of buy-to-let mortgage transactions being made for purchases.

The only property seeing an increase in transactions was HMOs, where 36% of transactions were purchases, up from 33%.

The data also shows that 96% of landlords borrowing via Mortgages for Business opted for a fixed rate buy-to-let mortgage in Q3 2108, up from 93% in the previous quarter, with 73% of those choosing to fix opting for five years.

Olejnik commented: “With the uncertainty surrounding Brexit and the possibility of another Bank Rate rise in the near future, I am not surprised that the majority of landlords are choosing to fix.

“It will be interesting to see what knock-on effect this will have on the buy to let remortgage market.”

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