9:21 AM, 3rd March 2026, 5 months ago
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Limited company borrowing now accounts for a record share of buy to let purchases, reshaping how many landlords structure new acquisitions, research reveals.
The analysis by Paragon Bank shows 43% of mortgaged BTL house purchases in 2025 were completed through limited companies, up from 35% the previous year.
That proportion has climbed steadily since 2018, when companies represented just 7.5% of completions.
BTL’s structural shift
The bank’s managing director of mortgages, Louisa Sedgwick, said: “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.
“As landlords have adjusted to being taxed on gross rental income, incorporation has become an increasingly attractive and often necessary route to maintain profitability.
“Limited company structures can potentially not only offer more efficient tax treatment but also provide greater flexibility for portfolio growth and long-term planning.”
She added: “The record share of purchases and remortgages completed through limited companies in 2025 underlines how deeply this trend is now embedded in the sector, and it is one we anticipate will continue.”
Mortgage interest tax relief
Changes to mortgage interest tax relief in 2017 altered the position for individual landlords, the lender says.
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.
Remortgage patterns show a similar direction of travel as limited companies accounted for 11.5% of completed BTL remortgages in 2025.
That compares with 10% in 2024 and 1.30% in 2018.
There are now 274,315 incorporated active businesses which is a higher total than the number of active firms in the hospitality industry.
Younger landlords tend to incorporate
The research also shows that 29% of landlords hold property solely through a limited company structure.
Another 36% combine personal and corporate ownership, taking the share with at least one Special Purpose Vehicle (SPV) to 65%.
Age data shows higher incorporation rates among younger investors.
Within the 25-34 age bracket, 57% of properties are owned via limited companies and 43% through mixed structures.
For those aged 35-44, the figures stand at 46% and 39% respectively.
Important context: Property118 is not currently recommending Section 162 incorporation for landlords with mortgages while legal uncertainty remains over the treatment of mortgage liabilities. Read our current position here: Why Property118 is not currently recommending s162 incorporation to landlords with mortgages
A conversation worth having?
If you are weighing up your own strategy, whether that’s to sell, expand, or restructure to improve profitibility, it is worth having a discussion with a Property118 consultant to take a closer look at how your portfolio is structured as a whole now, and to forecast the outcomes based on multiple scenario’s.
These conversations are typically most useful for landlords with established portfolios and relatively modest borrowing who are beginning to reflect on how their assets could work more effectively in the years ahead.
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