Foundation Home Loans (FHL) says it has been witnessing increasing interest in limited company buy-to-let purchase products from analysis of Decisions in Principle (DIPs) over the past few months to the end of January 2016.
According to the data in October and November only 3% of its DIPs were on limited company products. By the final month of 2015 that number had jumped to 28% and in January 2016 the percentage of new DIPS had reached 62%.
Simon Bayley, FHL’s commercial director, said: “Once the surprise at the Chancellor’s move on tax relief had been absorbed, it was only a matter of time before brokers and their clients were looking at the opportunity presented by this type of product. This is an area of the market that us and other lenders need to lead the way in providing robust alternatives to support the buy-to-let community.
“I think we will see this become a significant tool for landlords depending on their circumstances. Purchases will be the main focus, but it remains to be seen about the take up of this product for those wishing to place existing portfolios into an SPV. Enterprising advisers will already be talking to existing landlord clients with portfolios to look at the implications of moving to a limited company structure.
“For landlords with more complex portfolios, those conversations will undoubtedly need to include other professional advisers such as accountants and solicitors.”