What does the future hold for limited company BTLs?
See our current Buy-to-Let rates and offers.
By Sophie Mitchell-Charman
Since the tax changes that made being a landlord less advantageous came into force, affecting properties owned in an individual’s name, the Buy-to-Let market in this country has seen a drastic change.
Over the past half decade the growing professionalisation of the industry – away from retirees keeping second properties to top up income – has put more emphasis on portfolio and professional landlords.
With this has come an increased focus on portfolio incorporation and Limited Company Structures, which we’ve been talking about a lot this month.
That’s because the trend towards limited companies will continue and only get more prominent, and while the demand will be there it doesn’t mean lenders can take it easy, just expecting the business to come.
Technology needs to improve the process
View from BDMs: what they are seeing in the Limited Company and long-term Buy-to-Let markets
We heard from our BDMs how brokers are still crying out for a slicker process for incorporations across the market.
We’ve invested a lot of time and energy in to the technology that can simplify the process, including:
- Open Banking
- Equifax API Integration
- Portfolio Analysis via RightMove
- Jumio – For online ID verification through a smartphone
- Docusign – Online digital signatures
- Stripe – Online payments for fees throughout the process
The growth of the limited company market has correlated with increasing technology in the Buy-to-Let process, we need to keep ensuring these landlords are feeling the benefits of these forward steps.
Long-term investments
Read more: Case studies: Individual landlord and limited company remortgages
Part of the shift towards a limited company market is recognising the professionalisation of landlords, this is not a side-hustle or a hobby, it is a business, and like any business they need the options to safeguard their investments for the long term.
Products that recognise this will be vital. Whether they be long-term, 7- or 10-year Buy-to-Lets, or ones that incentivise improvements to the property to future proof it against future regulation changes.
We’re already seeing the impact the EPC requirements coming into force over the next 5 years are having on landlords, which is why our EPiC range has proved so popular to reward landlords with lower rates, or encourage them to future-proof their properties by making the necessary upgrades.
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This area of the Buy-to-Let market will only continue to grow, and it is essential lenders are able to grow their proposition along with it.