"Despite the growth in the number of purchase applications made via limited companies, the number of lenders and products catering to this part of the market has remained flat."
This is substantially higher than the 21% recorded before the changes to tax relief on mortgage interest were unveiled by former Chancellor George Osborne in July 2015.
The proportion of remortgage applications made via limited company structures also increased from 23% in Q3 to 31% in Q4, suggesting that greater numbers of investors are choosing to transfer their properties into limited company names.
However, while there has been a significant uptick in number of purchase applications made by limited companies, the amount of products and lenders catering for them remained flat.
Between Q3 and Q4 2016, the number of lenders offering products to limited companies stayed at 14. Meanwhile, the number of buy-to-let products available to limited companies increased slightly from 195 in Q3 to 198 in Q4. The proportion of products available to landlords using a limited company as a total of all buy to let products remained at 16%.
David Whittaker, Managing Director of Mortgages for Business, said: “The sharp increase in purchase applications made by landlords using a limited company structure is unsurprising given the financial incentive to do so, and it is encouraging to see growing numbers of landlords approaching their investments intelligently. With the changes to tax relief set to be phased in from April 2017, this trend is unlikely to be reversed any time soon.
“Despite the growth in the number of purchase applications made via limited companies, the number of lenders and products catering to this part of the market has remained flat. Although many mainstream lenders do not yet have an offering for investors using limited companies, many smaller lenders have significant expertise when it comes to servicing this part of the market.”
