he number of buy to let lenders lending to limited companies has risen by 47% over the past year as more landlords have opted to change their status to try to combat tax changes.

In the third quarter of 2018 alone, three new lenders have come to the market with 22 now competing in the sector, according to the data from specialist lender Mortgages for Business, up from 15 in the same quarter of 2015.

As a result of these new lenders, there are more buy to let mortgage products in the market. Overall the index shows that in the third quarter the total number of mortgage products available to landlords borrowing via a limited company averaged at 628, more than double the 263 available at this time last year.

In the wider mortgage market, an average of 1,571 products were available between July and September, in contrast to the second quarter of 2018 where the number of products averaged 1,547.

In terms of proportions of the mortgage market, 44% of completed buy to let mortgage transactions were made by limited companies, up 42% from the previous quarter.

The lender said that corporate structures, predominately Special Purpose Vehicles, can provide financial efficiencies and have proved increasingly popular since the changes in income tax relief on landlords’ finance costs were announced in July 2015.

The trend for remortgaging continued with only one third of buy to let mortgage transactions being made for purchases. The only property seeing an increase in transactions was HMOs, where 36% of transactions were purchases, up from 33%.

The research also reveals that 96% of landlords borrowing via Mortgages for Business opted for a fixed rate buy to let mortgage in the third quarter, up from 93% in the previous quarter and 73% of those choosing to fix opted for five years.

It adds that if the preference for five year fixed rates continues, it will have a knock-on effect of reducing the volume of buy to let mortgage borrowing.

‘It has been encouraging to see so many new entrants to the specialist end of the buy to let market in the last quarter, putting product availability at an all-time high. This just goes to show there is still a lucrative, buoyant market out there following on from the recent regulatory changes,’ said Steve Olejnik, managing director at Mortgages for Business.

‘With the uncertainty surrounding Brexit and the possibility of another Bank Rate rise in the near future, I am not surprised that the majority of landlords are choosing to fix. It will be interesting to see what knock-on effect this will have on the buy to let remortgage market,’ he added.