We've outlined the common savings accounts designed to make your money work harder.
It’s fair to say being a landlord is not what it once was.
Severe tax and regulatory changes have hit landlords’ profits over recent years, including the introduction of the 3% stamp duty surcharge, the scrapping of the ‘wear and tear’ allowance, and mortgage tax relief cuts. This has led to many professional landlords questioning the viability of the market.
The industry and landlords alike have spent a turbulent couple of years adjusting to the new buy-to-let regulations - which come into full force April 2020 - which will change how the buy-to-let market functions. It may, on paper, sound bleak. However, rental properties remain in demand in the UK with a shortage of housing for purchase and the growing number of households framing the buy-to-let market as a worthy investment – especially for those with a portfolio of several properties.
Are professional landlords turning to limited company structures for better tax pay-off?
The market has seen a sharp increase in professional landlords purchasing buy-to-let properties through a limited company structure in order to minimise the financial blow to their pockets.
Why is this? The answer, unsurprisingly, is simple: money. A limited company buy-to-let is treated differently to that of a ‘standard’ buy-to-let. For example, instead of paying tax as an individual, a limited company mortgage structure means corporate tax is paid instead as it is possible to offset the mortgage interest against profits.
It seems savvy landlords have already cottoned on to this. Recent research by Foundation Home Loans revealed 62 per cent of landlords with one to 10 properties purchased via a limited company, almost equal to the 65 per cent of those with 11 or more rentals - a substantial slice of the buy-to-let pie.
Purchasing property through a limited company shows no sign of tailing off as landlords seek alternative, more affordable forms of financing. So much so, mortgage lenders – much like Newbury Building Society – have strengthened their limited company buy-to-let propositions to give borrowers access to better rates and flexible lending criteria. So, if you’re a landlord looking for a limited company mortgage, we are here to help.
As with every financial decision, we always recommend seeking advice from a qualified financial adviser and a tax specialist.
If you'd like to talk to a qualified mortgage adviser about your options, contact us today. We offer face-to-face, telephone and video advice mortgage appointments for those who cannot make it to a branch.
*all figures and data correct as of February 2020
YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGANST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPLAYMENTS ON YOUR MORTGAGE.