Specialist packager Thistle Finance has seen a 30% increase in the number of UK landlords incorporating their portfolios during the second quarter of the year compared to the first.
The average portfolio size being incorporated also decreased by around 40% during Q2, suggesting smaller-scale landlords are also now realising the increased tax benefits of owning their properties through a limited company.
Mark Dyason, managing director, Thistle Finance, said: “Smaller-scale portfolio landlords who have been toughing it out in recent years are increasingly waking up to the benefits of incorporating their portfolios.
“The number of landlords doing this has been rising gradually for some time but in the second quarter of the year we saw the trend really begin to accelerate.
“Landlords that are genuinely committed to buy-to-let are starting to optimise their portfolios, not just by remortgaging onto better rates, where’s there’s a huge amount of activity, but by moving into limited company ownership.
“During the past few years, many amateur landlords have called it a day, but those that have dug in have smartened up and are following the example of larger, professional landlords.”
Many amateur landlords started to exit the sector when the 3% stamp duty surcharge and gradual withdrawal of mortgage interest tax relief were first announced, but those that have remained have increasingly started to incorporate.
Crucially, a growing number of lenders have started to offer limited company buy-to-let mortgages, with rates falling as a result of the increased competition — making the incorporation route more attractive still.
