Closeup of a teacher writing simple sums in chalk on a blackboard

Some stats around limited company mortgages:

  1. Number of buy-to-let applications for limited companies grew to 30% in H2 2016  vs 18% for the same period the year before
  2. Amount borrowed for limited companies grew to 30% in H2 2016  vs 20% for the same period the year before
  3. Products have increased from 147 to 154
  4. Rates have increased from 4.4% to 4.5%
  5. The government has announced that corporation tax will come down to 15%

Although we all expected an increase in lending to limited companies I find these number quite interesting.

Firstly yes there is an increase in both applications and loan amounts but on the surface not by as much as I would have expected however this covers both remortgages and new purchases. When we look at new purchases only the picture is quite different according to David Whittaker,MD  Mortgages for Business “rising from less than 20% by number (25% by value) in the first half of 2015 to over 50% in 2016, with second quarter applications by limited companies running at over 60% of total applications related to purchases of buy-to-let properties”

Secondly the number of products available has only increased by a tiny amount and the rates on offer have actually increased over the past year.

It is odd that lenders have not been falling over themselves trying to grab a slice of this market. Especially given that the trends clearly show a growing appetite for this type of mortgage. I think there is a good opportunity to for a couple lenders to step up and offer a number of really competitive products. This should entice other lenders as well to add more products and generally start to push rates down. Rates could even come in line with standard buy-to-let mortgage rates. The reduction in corporation tax will only make investing in a limited company that more attractive.