Number of limited company fixed rates at all-time high
24 April 2018
Last year, the tax reliefs for buy-to-let (BTL) landlords were cut, meaning that they had to start assessing their options – and becoming a limited company was one of them. With more demand for this type of company, research from moneyfacts.co.uk shows that providers have stepped into the breach and are now offering more fixed products to limited companies than ever before.
Number of Fixed Limited Company Mortgages
Apr-13: 17 Apr-16: 80 Apr-17:212 Apr-18:235 Source: moneyfacts.co.uk
Charlotte Nelson, Finance Expert at moneyfacts.co.uk, said: “The figures from moneyfacts.co.uk show that the number of fixed rates available to limited companies has almost tripled in the space of just two years. Reaching 235 in April, this is the highest number on moneyfacts.co.uk’s records.
“The reality of last year’s tax changes hit landlords hard, as they were unable to claim tax relief. However, with things working slightly differently for limited companies, many landlords have started to shift their focus from individual ownership to this type of private company.
“Providers who are still eager for buy-to-let business have put their best foot forward and are now offering more products than ever to meet this extra demand. Yet, despite there being more products on the market, under a quarter of the BTL market offers this option.
“Borrowers considering this type of mortgage should be aware that they could find themselves on a more expensive deal compared to the rest of the BTL market. For example, the average two-year fixed rate BTL mortgage, for those applying as a limited company, stands at 4.29% today. Whereas the average two-year fixed rate for the rest of the market is significantly less at 3.01%.
“With all the extra legwork that becoming a limited company entails, and how widely the costs can vary depending on circumstances, any borrowers considering it should consult a financial adviser and do the sums before committing to this option.”
Best Buys and true cost scenarios available upon request.
