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Limited company purchase plans hit three-year high

The proportion of landlords who plan to purchase their next buy-to-let property through a limited company has hit the highest level for three years, according to research undertaken on behalf of Paragon Bank. 

A substantial uplift from 50% in the first quarter of the year to 62% in Q2 2022 has led to a three-year high in the proportion of buy-to-let investors who intend to purchase their next property utilising a limited company structure. 

The research highlights how the propensity to incorporate tends to increase with portfolio size. Just under half (47%) of landlords who own between one and five properties expect their next purchase to be through a limited company, rising to over three quarters (78%) amongst those with portfolios consisting of six or more buy-to-let homes. 

 The survey of over 700 landlords, found that in the next 12 months, 14% of landlords plan to purchase buy-to-let properties. Of those who intend to expand their portfolios, two thirds (66%) said that they plan to finance their next property investment through a buy-to-let mortgage. The proportion of landlords who plan to fund purchases by releasing equity from existing properties was 28%, while only 7% plan to purchase outright using previously invest funds.

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