David Whittaker
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Latest property news
Number of landlords setting up limited companies rises nearly four-fold
The number of landlords setting up limited companies to run their businesses through has increased dramatically as the April 6th tax relief deadline looms, it has been claimed. Lender Mortgages for Business says the number of landlords applying for loans through limited companies has increased from 21% of all applications in 2015 to 77% of today, an almost four-fold increase. Purchases and transfers Mortgage for Business says the increase is made up of both landlords purchasing properties through newly set-up limited companies, and those transferring existing personally-owned properties to limited companies. The government is gradually reducing the finance cost relief that landlords personally receive on their mortgage interest payments each year between now and 2021, when the relief will end. Limited company mortgages are also quickly starting to eat up more of the overall buy-to-let market, increasing from 18% two years ago to 47% today, and the number of buy to let mortgages available has increased too, by more than a third. “With the changing face of the buy to let mortgage market, it is no surprise that lenders are keen to appeal to limited company borrowers,” says David Whittaker, CEO of Mortgages for Business (pictured, left). “We have been…
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Housing Market
Rental yields fall
Average rental yields on buy-to-let properties fell in the second quarter of this year, the latest buy-to-let index compiled by Mortgages for Business shows. Returns on residential rental properties fell from 6.4 per cent to 5.8 per cent between the first and second quarters of 2015, led by declines in the Houses in Multiple Occupation (HMOs) sector which saw yields drop 1.3 per cent to 9.3 per cent. The figures also reveal that the average loan-to-value (LTV) ratio in the second quarter of 2015 for standard buy-to-let and multi-unit freehold blocks remained unchanged at 66 per cent and 67 percent in relation to the first quarter of this year. David Whittaker (left), Managing Director of Mortgages for Business, said, “While rental yields are still robust they seem to have lost the momentum they were gathering between the end of last year and the start of this one.” But Whittaker pointed out that multi-unit freehold blocks seem to have avoided the yield downturn, demonstrating once again that complex property types produce higher yields “because they offer tenants more features and facilities”. He added, “While many landlords had hoped that the improving economic climate may have pushed loan-to-value ratios even higher, the…
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