- Less than one in ten landlords (9.7%) choose to invest as an individual
- Two in five (42%) already invest through a limited company
- Half (48%) plan to invest through a limited company or are interested but don’t know how
- Four in five (80%) think the UK property market will see modest to strong growth in the next five years
The Government’s plan to professionalise the buy to let sector is working, according to leading UK property developer SevenCapital, which has revealed that less than one in ten (9.7%) UK private landlords now actively choose to invest in property as an individual.
Instead, research by the developer suggests that more than two in five residential landlords (42%) now invest through a limited company, and just under half (48%) are either planning to (30%) or are interested but don’t know how (18.3%).
The poll also found that more than half (53%) believe that the UK property market will be stronger in 18 months’ time, and four in five (80%) believe the market will be stronger in five years’ time. Of these, more than a quarter (26%) agree that UK house prices will achieve more than 15% growth over the next five years, proving the continued confidence and resilience within the sector.
This comes after numerous changes to the tax relief system imposed on buy to let landlords over recent years, which has seen an exodus of so-called accidental landlords who are no longer able to make the figures add up to a perceived profitable investment.
Andy Foote, director at SevenCapital, commented: “These figures really highlight just how much has changed in terms of how property investors choose to buy and operate in the UK property market these days.
“Of course, investing as an individual will remain the right path to go down for some people, as investing is very circumstantial – whatever type of investment you choose. However more and more we’re seeing investors choosing to buy through a limited company or expressing an interest in how to go about it, which is certainly the case now at SevenCapital.
“Depending on your objectives and your personal situation, buying through a limited company offers many benefits, including making your investment more tax efficient, as well as shielding you from some personal liability which can help to protect your other assets.
“What we as a sector need to do now is make sure that the new buy to let rules and ways to invest are fully understood by everyone within the sector, enabling investors to make informed and correct decisions for their circumstances. I think we have a duty to educate on all areas, including the pros and cons of investing through a limited company and the process for setting one up.”
He added: “It’s encouraging to see that positivity remains within the market over the long-term – another sign perhaps of the increasing maturity of the sector, with long-term views and a sound understanding of the workings and cyclical patterns of the UK’s property market.”
SevenCapital polled its own database of property investors and landlords with a total of 300 respondents providing the results.
*SevenCapital does not advise on financial matters, always seek advice from an approved tax or finance professional.
For more information visit sevencapital.com.