Four in five landlords hold property in limited companies: Getground

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It found that 81% of landlords hold this proportion of properties in this form and that 79% of these owners who invest partially or entirely through limited companies believe that doing so puts them in a better position to combat rising inflation than if they were to invest in property in their own name.

The report found that 76% of those surveyed say that limited companies have allowed them to adjust more easily to rising inflation, while 73% add that limited company investing makes them feel more protected against inflation.

Earlier this month inflation hit 9%, the fastest rate of rising prices for 40 years as higher energy bills were posted to millions of households.

The study comes after a record 47,400 UK BTL firms were established last year, a 14% jump on 2020, according to earlier data from Hamptons.

In January, the estate agent said that half of all new BTL mortgages were taken out by a company, meaning that firms now account for 29% of outstanding BTL mortgages.

It points out that last year’s incorporations are almost twice the number that were set up in 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.

GetGround chief executive Moubin Faizullah says: “Whether it’s because of its financial, administrative or time-saving benefits, it’s unsurprising that a limited company structure is recognised as a useful defence mechanism against the impact of inflation.

“And, in this unprecedentedly high inflation environment, limited companies prompt greater responsible investment too. By moving to a limited company structure, landlords reduce the costs of running their property investments, making them better placed to keep rents at an affordable ‒ while still profitable ‒ level for their tenants.”

The GetGround study also suggests that landlords with single investment properties or smaller portfolios are less likely to choose limited company structures than those with larger portfolios. It adds that of the landlords it surveyed, 60% do not hold any property investments in limited companies.

Faizullah adds: “Our small scale landlords are the lifeblood of a healthy private rented sector and are vital to making sure tenants are secure in their homes while we all endure this cost of living crisis.

“At a time when some smaller landlords might question the long-term viability of property investing, the industry can and must do more to dispel myths and misunderstandings that surround limited company investing.

“Gaining a better perspective on the investment structure could be the deciding factor for many of these people when they consider whether or not being a landlord continues to be the right thing for them.”

GetGround says the survey was conducted on its behalf in February and involved several hundred UK-based landlords.