Roma Finance sees growth in SPVs for funding buy-to-let property

Michael Lloyd

March 28, 2018

Bridging lender Roma Finance has reported that the buy-to-let market is still popular with landlords running their portfolios as limited companies and using Special Purpose Vehicle (SPVs) to fund new acquisitions.

In the six months to the end of February, Roma have seen a significantly greater proportion of their bridging loans for buy-to-let purposes being put through for limited companies as opposed to individuals.

Payam Azadi, director at Niche Advice Limited, said: “I think it’s an overall trend across the whole buy-to-let market especially for applicants who are higher rate taxpayers or professional landlords.

“We’re seeing more of them choose the SPV route, whether for bridging or standard buy-to-let purposes. It’s natural.

“There’s been a hike in the number of SPV transactions taking place. It’s vital for mortgage advisers to point out they’re not tax advisers and applicants should seek professional tax advice. It’s really important.

“The SPV route could be more tax efficient but it depends on their circustances. They should discuss it with their tax specialist first.”

The type of property being acquired by landlords has also reflected the changing market for landlords, with more HMOs and semi-commercial property featuring more strongly against the traditional buy-to-let housing stock.

Scott Marshall, managing director at Roma Finance, said: “We’re seeing most of our landlord customers with larger portfolios transferring them into limited company status and using SPVs to help raise the new funding needed for purchases and refurbishments.

“The market in this segment remains upbeat with our share of lending on buy to let still strong for a wide range of property acquisition and refurbishment.

“Landlords and property investors have put in place new company structures and strategies to protect their portfolios and maximise future income and growth.

“We’re seeing this in practice and business written on limited company buy-to-lets is strong as the landlords we work with are very well informed on these investment techniques.”

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