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TODAY'S OTHER NEWS

Limited company buy-to-lets surge 2000%

Landlord attempts to escape George Osborne's tax crackdown have triggered a 2000% rise in the number of limited company buy-to-let mortgage applications.

New figures from Foundation Home Loans show a dramatic surge in the number of decisions in principle for this type of deal in just three months.

This follows figures on Wednesday from lender Mortgages for Business showing that 43% of its buy-to-lets are now limited company applications.

Foundation Home Loans said limited company buy-to-lets made up just 3% of its decisions in principle in October and November.

By January the proportion of new limited company deals had spiralled to 62%, an increase of 1966%.

Investors who set up limited companies will sidestep the Chancellor's plans to phase out higher tax relief from April 2017.

Foundation's commercial director Simon Bayley said the surge in interest was to be expected.

“Once the surprise at the Chancellor’s move on tax relief had been absorbed it was only a matter of time before brokers and their clients were looking at the opportunity presented by this type of product.

“Lenders need to lead the way in providing robust alternatives to support the buy-to-let community.”

Bayley said limited company mortgages will become a "significant tool" for many landlords.

“Purchases will be the main focus, but it remains to be seen about the take up of this product for existing portfolios.

“Enterprising advisers will already be talking to existing landlord clients with portfolios to look at the implications of moving to a limited company structure.” 

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