Research found that whilst just 14% of landlords are seeking to purchase property over the next 12 months, over half of those (55%) will do so via a limited company.
Landlords who are planning to add to portfolios in the next year are significantly more likely to do so via a limited company vehicle, research from Foundation Home Loans has found.
It found that while only 14% of landlords said they would be seeking to purchase property over the next 12 months, over half of those (55%) would do so via a limited company, up from 53% in the quarter one iteration of the research.
Some 24% of those who said they would be purchasing would do so as an individual – down from 26% three months ago, while 13% said it would depend on their circumstances at the time.
Close to seven in 10 landlords said they would be using a buy-to-let mortgage to fund their next purchase, with the same number saying they used a mortgage adviser to arrange their most recent buy-to-let mortgage.
This number was higher for those with larger portfolios with 75% of those with six-10 properties using an adviser and 72% of those with 11-19 properties. Those with only one property were more likely to have gone to a lender direct when sourcing their finance with 31% having chosen this method of finance for their last buy-to-let mortgage, although the average for all landlords was less at 20%.
Jeff Knight, director of marketing, Foundation Home Loans, said: “It’s clear that the majority of those landlords who will be purchasing over the next 12 months, intend to do so via a limited company, while we are also seeing a growing number of landlords willing to take the stamp duty hit in order to move properties from their individual name.
“Clearly, if this new government were to provide any stamp duty incentive to landlords, as well as residential homeowners, we might expect such a trend to grow rapidly.
"Whether this is on the agenda alongside potential cuts to stamp duty for those purchasing their main home, remains to be seen.
“The further good news for advisers from this research is the continued demand for their services, but also the number of landlords who are still going direct to a lender to secure their finance which means that advisory firms also have a large number of potential clients to target.
“In that sense, getting the marketing message right and ensuring advisers put their services in the shop window for landlords is crucial, given that 20% of landlords went direct for their last buy-to-let mortgage and one could argue that more competitive and appropriate products could be sourced from across the entire market.
"Given the competition in the sector and quality of advice available, this is 20% too many and as a lender we are here to help advisers build their buy-to-let propositions and to ensure they gain, as well as, retain their landlord clients.”
The research - undertaken by BVA BDRC and carried out in June 2019, was based on the results of 738 online interviews.
