A record number of buy-to-let companies were set up last year, with half of new buy-to-let mortgages taken out by a firm rather than an individual landlord.
Hamptons reports that 47,400 buy-to-let companies were started in 2021, up 14% on 2020, most of them in London and the South East. Companies House data also shows that 61% of the 269,300 current companies have been incorporated since April 2017 when it was announced that investors with properties in their personal names would no longer be able to claim mortgage interest as an expense.
Young companies
Half of new buy-to-let mortgages in 2021 were taken out by a company rather than someone buying in their personal name, while 40% of these new purchases went into a company which was less than a year old. Buy-to-let companies currently hold 583,000 mortgaged properties, accounting for about 29% of all existing buy-to-let mortgages nationally, up from 26% a year ago.
Aneisha Beveridge, head of research, says that despite record numbers of rental homes being held in companies, the growth in buy-to-let businesses has come from smaller landlords rather than larger institutions. “Only 20% of buy-to-let businesses hold more than three mortgaged properties, a similar profile to landlords who hold homes in their personal name,” she says.
Peak reached
Beveridge adds that the number of new buy-to-let incorporations in 2021 is probably close to its peak, with fewer likely to be set up in 2022 – partly a product of last year’s stamp duty holiday which served to slow the fall in new investor numbers and also due to the fact that those investors who wanted to make tax savings by transferring properties from a personal to a company name have probably already done so.
The Hamptons Monthly Lettings Index reveals that monthly rents in all four regions of Southern England (London, SE, SW and E) surpassed £1,000 for the first time in December as rents rose 7.2% nationally over the last 12 months.
Credit: Source link
