A growing wave of property investors are turning to limited company structures to manage their buy-to-let (BTL) portfolios, as landlords respond to mounting regulatory pressure and shifting tax policy.
New research from Coventry for intermediaries reveals that 72% of limited company landlords entered the market in the past five years, with nearly a third (30%) of those entering the BTL sector for the first time.
The trend is expected to continue, with half of landlords planning to expand their portfolios over the next two years.
Recent legislative changes – including reforms to Capital Gains Tax and the looming Renters Reform Bill – have prompted investors to seek more tax-efficient and professionalised models of portfolio ownership.
TAX EFFICIENCY
For 41% of landlords surveyed, tax efficiency was the primary motivation for incorporating. Among larger landlords – those with four or more properties – 47% have incorporated in the past five years, compared to just 30% of smaller landlords.
However, a third of landlords said understanding the legal and tax implications of incorporation remains a key barrier.
Coventry’s report, The Broker’s Guide to Limited Company BTL Mortgages, also points to a significant shift in the intermediary landscape.
COMPLEX DECISIONS
Nine in 10 brokers have advised on limited company BTL mortgages in the past three years – a stark rise from just 25% a decade ago.
Yet only 35% of landlords used a broker to arrange their most recent limited company mortgage, suggesting many are navigating complex financial decisions without professional advice.
Jonathan Stinton, Head of Intermediary Relationships at Coventry for intermediaries, says: “Landlords are looking for more than just the best rate – they want sound, strategic advice to help them grow professionally and navigate the complexity of limited company BTL.
“That’s a golden opportunity for brokers to deepen relationships and offer real value.”
