More than four in five homeowners hold at least a quarter of their real estate portfolio in public limited companies, which they say act as a buffer against inflation, according to a survey of Getground buy-rent platform.
He found that 81% of owners maintain this proportion of propertyin this form and that 79% of those owners who invest partially or entirely through limited companies believe that doing so puts them in a better position to fight rise in inflation than if they were to invest in real estate in their own Last name.
EThe report revealed that 76% of respondents say corporations have made it easier for them to adjust to rising inflation, while 73% to add this investment in a limited company makes them feel more protected against inflation.
Eearlier this month, inflation hit 9%, the fastest hazard rateawards for 40 years like higher energy bills were posted to million homes.
The study comes after a record 47,400 UK BTL companies were created last year, a jump of 14% compared to 2020, according to earlier Hamptons data.
In January, the realtor said half of all new BTL mortgages were taken out by a business, meaning businesses now account for 29% of outstanding BTL mortgages.
He points out that last year’s incorporations are almost twice as many as in 2017, when it was announced that investors with properties in their personal name would no longer be able to claim mortgage interest as an expense.
GetGround general director Moubin Faizullah said: “Whether because of its financial, administrative, or time-saving benefits, it’s no surprise that a limited company structure is recognized as a useful defense mechanism against the impact of inflation.
“And, in this environment of unprecedented inflation, corporations are also pushing for more responsible investment. By moving to a limited company structure, landlords reduce the costs of managing their real estate investments, which puts them in a better position to keep rents affordable ‒ while remaining profitable ‒ for their tenants.
The GetGround study also suggests that owners with unique investment properties or smaller portfolios are less likely to choose limited liability company structures than those with larger portfolios. He adds that of the owners this investigationed60% do not hold any real estate investment in public limited companies.
faizullah adds: “Our small-scale landlords are the cornerstone of a healthy private rental sector and are essential to keeping tenants safe in their homes while we all experience this cost of living crisis.
“At a time when some small property owners may question the long-term viability of real estate investing, more can and should be done by the industry to dispel the myths and misunderstandings that surround investing in limited liability companies.
“Having a better perspective on the investment structure could be the deciding factor for many of these people when considering whether or not owning continues to be the right thing for them.
GetGround say it investigation has been conducted in his name in February and implyed several hundred UK-based owners.