Buy-to-Let drifts towards company ownership

admin    Uncategorized     agents

Incorporation:

The number of privately-rented homes in Britain, rented out
by a landlord company, has risen to around 12% of the British market. Although small-scale
“sole-trader� landlords still dominate the scene, there has been a steady move
towards larger portfolio landlords owning their homes through a limited
company.

The move, which is being propelled by tax changes introduced
a couple of years ago by the then Chancellor, George Osborne, plus the growing build-to-rent
initiative, is now said to be “professionalising�, the sector.

The motives behind the Government’s changes towards
buy-to-let are still unclear: but some experts attribute them to a fear that
buy-to-let was pricing out first-time buyers, that the buy-to-let market was
growing too quickly, leading to extended mortgage debt and financial
instability, and being dominated by small-scale landlords the industry was said
to be harbouring too many rogues.

London landlords are the ones most likely to own a
buy-to-let using a company structure, that’s according to the research carried
out by Hamptons International. It found that around 12% of privately-rented
homes across Britain were let by a company landlord in the first half of 2019 –
this is the highest proportion recorded since 2011, when Hamptons say it was
also 12%.

Hamptons, which uses its own data to make the calculations,
says that in London around 13% of privately-rented homes are now let by
company landlords. Hamptons’ theory is that the increase is due to the growing
size of the rental sector.

Aneisha Beveridge, head of research at Hamptons
International, has said:

“More than one in 10 rental properties are now owned by
private companies, an indication that the sector continues to professionalise.

“Increasing taxation for private landlords combined with the
growth of the build to rent sector has meant that more companies are letting
homes than at any time since our records began.

“London, where landlords tend to have higher levels of debt
and often the most to gain from corporate ownership, has the largest proportion
of homes let by a company.

“However, it’s not always more profitable to put a
buy-to-let into a company as other associated costs come into play.�

Hamptons International
has published the following figures for region by region percentages of privately-rented
homes let by company landlords:

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Buy-to-Let drifts towards company ownership | LandlordZONE.

View Full Article: Buy-to-Let drifts towards company ownership

If you enjoyed this article please consider sharing it!