Landlords Will Make More Limited Company Purchases
More landlords will buy property using a limited company in 2019, research suggests.
Foundation Home Loans says that most landlords who are looking to expand their portfolio over the next 12 months will probably do so using a limited company vehicle.
The research also reveals that portfolio landlords, that's an investor with at least four buy to let mortgaged properties, are more likely to use a limited company for a purchasing property.
Researchers found that seven in 10 landlords who have at least 11 properties say they will be using a limited company.
The firm's director of marketing, Jeff Knight, said: "Landlords seem pretty positive, with concerns about tenant demand falls and how current and future economic and regulatory change will affect their portfolios.
‘More portfolio landlords being active in the sector’
"We're seeing more portfolio landlords being active in the sector and while there's not been a huge exodus that many predicted, it's less likely that landlords with one or two properties will be adding to them."
He added that portfolio landlords are showing serious ambitions and more landlords are looking to remortgage properties from their individual name and into a limited company.
Researchers found that the average portfolio is worth around £1.4 million, with gross rental income being an average of £66,000. The average amount of borrowing for landlords is £427,000 across a portfolio.
Also, 19% of landlords say that tenant demand has increased over the last three months and 37% say there's been no change.
The strongest tenant demand around the country is currently being seen by landlords in the Midlands.
Surge in demand for The Property Ombudsman’s services
Meanwhile, the Property Ombudsman says that demand for its services has never been stronger in its latest report.
The number of enquiries last year grew by 22% to 29,023 and 4,246 of these became formal complaints. The report reveals that 54% of these complaints were being made by landlords and 42% by tenants.
That is a year-on-year rise of 16%.
Of those formal complaints, 2,782 were supported by the ombudsman and 2,381 needed a financial award to be paid. The average award was £845.
For the first time, payments made by agents surpassed £2 million to £2.17 million. That figure has doubled since 2016.
Katrine Sporle, the Property Ombudsman, said: "2018 was a busy year and it does not mean necessarily that agent standards are slipping but consumers are becoming increasingly aware of their rights."
Greater London saw the largest volume of complaints with 20%, followed by the South East on 17% and the North West on 11%. The reasons for complaints were topped by communication, record-keeping, followed by management and tenancy agreements.