Taylor Scott International News
Lending to buy to let investors borrowing via limited companies in the UK grew in the first half of the year according to the latest data to be published and the number of lenders and products available to limited company borrowers also increased. According to transactional data the number of buy to let mortgage applications completed by limited companies grew to 30% of all buy to let completions, up from 21% in the second half 2015, and 18% in the first half of 2015. By volume the number grew to 30% of all buy to let loans, up from 25% in the second half of 2015 and 20% in the first half of 2015, according to the buy to let data from Mortgages for Business. It also shows that the number of lenders offering products to limited company borrowers also increased in the first half of the year to 14 from 12 in the second half of 2015. The rise was due to existing buy to let lenders introducing limited company products rather than new lenders entering the buy to let sector. Lenders offering limited company products now account for 42% of the whole buy to let lending sector, up from 30% in the first half of 2016. Product numbers increased to an average of 154, up from 147 in the last six months of 2015, although the actual proportion of them as a percentage of the whole buy to let market fell due to the increase in product numbers available to individual borrowers. Whilst average products numbers for limited companies accounted for 13% of all buy to let products in the first half of 2016 but by the end of June the percentage had risen back to 16% of all buy to let products, the same percentage recorded in the first half of 2015. ‘Both applications and completions for limited company borrowers appear to have stabilised at around one third of all buy to let business,’ said David Whittaker, managing director of Mortgages for Business. ‘However this masks a dramatic change in the investment pattern for new purchases where the proportion investing through limited companies has risen from less than 20% by number or 25% by value in the first half of 2015 to over 50% in 2016, with second quarter applications by limited companies running at over 60% of total applications related to purchases of buy to let properties. This increasing proportion will also drive an increase in the proportion of completions in the next quarter,’ he explained. He pointed out that there has only been a slight uplift in the proportion of remortgaging activity that relates to limited company borrowers, due to historical investment patterns. ‘It would, however, appear that some landlords who already own property personally are sitting on their hands somewhat and holding back from remortgaging, probably waiting to see how the economy pans out post-referendum,’ he said. ‘With the Chancellor announcing his intentions to lower corporation… Taylor Scott International
Taylor Scott International, Taylor Scott
