According to Paragon Bank research, most (82%) landlords who own six or more properties prefer utilising limited companies to acquire and manage their properties. This highlights the advantageous nature of this structure, especially for those with higher property income.
However, as Louisa Sedgwick, the Commercial Director of Mortgages at Paragon Bank, notes. At the same time, there are benefits associated with using a limited company; it may only be preferable for some investors.
“I think intermediaries are right to expect to see more limited company business this year. It is a structure that has become increasingly popular with landlords in recent years as they have responded to Government changes to the tax treatment of buy-to-let property ownership.
“Owning properties through a limited company can enable landlords to offset finance costs, such as mortgage interest, against rental income. It’s wise for borrowers to seek professional advice because incorporation may not be the best route for all landlords, and the benefits can vary based on individual circumstances.”
In 2023, another survey by Paragon Bank showed that roughly three-quarters of landlords planning on buying a new buy-to-let property in 2024 would conduct their business via a limited company structure.
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