## Limited Company Ownership Hits Record Share in Buy-to-Let Market

Limited company borrowing now represents a record share of buy-to-let (BTL) property purchases in the UK, according to recent analysis by Paragon Bank. In 2025, 43% of mortgaged BTL house purchases were completed through limited companies, up from 35% the year before. This steady increase has been evident since 2018, when limited companies accounted for just 7.5% of BTL completions.

This growing preference for corporate ownership is reshaping how landlords structure new acquisitions, signalling a long-term shift in the private rented sector.

## Structural Shift Driven by Tax Changes

Louisa Sedgwick, Paragon Bank’s managing director of mortgages, explained the reasons behind this trend: “The continued rise in limited company buy to let activity reflects the structural shift we’ve seen in the market since the 2017 tax changes.” The 2017 reforms altered how landlords are taxed, moving from deductions on mortgage interest to taxation on gross rental income.

“As landlords have adjusted to being taxed on gross rental income, incorporation has become an increasingly attractive and often necessary route to maintain profitability,” Sedgwick added. She highlighted that limited company structures offer more efficient tax treatment and greater flexibility for portfolio growth and long-term planning.

The record share of purchases and remortgages completed through limited companies in 2025 underlines how deeply this trend is embedded in the sector, with expectations that it will continue.

## Impact of Mortgage Interest Tax Relief Changes

The 2017 changes to mortgage interest tax relief significantly affected individual landlords. Finance cost deductions were phased out and replaced with a 20% tax credit, resulting in taxation on gross rental income rather than post-interest profit. This shift has encouraged many landlords to incorporate their property holdings to benefit from more favourable tax treatment.

Remortgage activity reflects a similar pattern, with limited companies accounting for 11.5% of completed BTL remortgages in 2025, up from 10% in 2024 and just 1.3% in 2018.

Currently, there are 274,315 active incorporated businesses in the sector, a number exceeding that of active firms in the hospitality industry, illustrating the scale of incorporation among landlords.

## Younger Landlords More Likely to Incorporate

The research also reveals that 29% of landlords hold property solely through a limited company, while another 36% combine personal and corporate ownership. This means 65% of landlords have at least one Special Purpose Vehicle (SPV) in their portfolio.

Age demographics show younger landlords are more inclined to incorporate. Among those aged 25-34, 57% of properties are owned via limited companies and 43% through mixed structures. For landlords aged 35-44, 46% of properties are held in limited companies, with 39% under mixed ownership.

This suggests that younger investors are more responsive to the tax and structural benefits of limited company ownership, which may influence future market dynamics.

## What This Means for UK Landlords

The rise in limited company buy-to-let purchases reflects a fundamental change in how landlords approach property investment and taxation. Incorporation offers potential tax efficiencies and greater flexibility for portfolio expansion, which is increasingly important in a market shaped by tax reforms.

Landlords should consider the implications of these trends for their own portfolios, including the potential benefits of limited company ownership and the administrative requirements involved. Staying informed about tax legislation and mortgage options remains crucial in navigating the evolving buy-to-let landscape.

Suggested internal link anchors
– buy to let purchases
– limited company buy to let
– mortgage interest tax relief
– Special Purpose Vehicle (SPV)
– landlord tax changes
– portfolio growth
– remortgage trends
– younger landlords
– property investment strategies
– buy to let market trends

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/