Limited company buy-to-let applications accounted for 43% of all new buy-to-let cases in January – up from 38% in December, analysis from Mortgages for Business has found.
Buy-to-let landlords purchasing through a limited company will be able to avoid the upcoming tax changes, which will see the amount of higher rate tax relief landlords can claim back cut from 45% in 2017 to 20% in 2020.
David Whittaker, managing director of Mortgages for Business said: “Landlords have woken up to the fact that transacting via a corporate vehicle is a feasible option and in many cases, the most prudent route going forward.
“I wouldn’t be surprised if the percentage continues to rise as landlords, especially the higher tax rate-paying ones, prepare for the forthcoming changes to relief on finance costs.”
The total number of buy-to-let let mortgage applications rose by 27% in January compared to December.
Whittaker added: “The increase is due to landlords trying to get as many purchases as they can completed before the stamp duty surcharge comes into effect on 1 April, after which I would expect transactions to return to more considered levels.”