Roma Finance see growth in SPVs for funding buy to let property

28 March 2018

Roma Finance, the specialist bridging finance lender, 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.

A popular route to landlord companies are using to raise the required funds is to set up an SPV in order to minimise the tax over the term of the investment. Indeed for many higher tax banded property professionals this is now the preferred method of raising the required finance to grow and develop their property empire.

Despite landlords being hit with a number of challenges in the last twelve months, Roma’s view is that those with larger portfolios are wise to alternative routes to maximise efficiencies, protect income and generate the required yields for their property business.

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, commented: “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.”