The UK’s private rental sector is undergoing a seismic shift, with new research revealing a surge in landlords adopting corporate structures and diversifying into specialist property investments.
According to Foundation Home Loans’ Q1 2025 Landlord Trends report, compiled by Pegasus Insight, 60% of landlords planning to purchase property in the next year intend to do so through a limited company – a sharp rise from just 36% five years ago.
Today, two-thirds of all rental properties are held within a corporate structure, reflecting a significant trend toward professionalisation.
LIMITED COMPANY SURGE
The data shows a stark contrast in portfolio sizes between ownership types. Landlords using limited companies own an average of 14.6 properties, compared to just 5.2 for those holding assets personally.
The report highlights growing investor interest in Houses in Multiple Occupation (HMOs) and holiday lets.
One in five landlords now owns at least one HMO, rising to one in four among portfolio borrowers. Holiday lets are also on the rise, held by 6% of landlords overall – but that figure doubles among landlords with larger portfolios.
Despite rising costs and looming regulatory reforms, landlords are still seeing strong returns.
STILL PROFITABLE
Average rental yields remain healthy at 6.3%, just shy of a 10-year high. Some 84% of landlords report making a profit, with 17% claiming a large profit and 67% seeing modest gains.
Remortgaging remains a key strategy in the face of economic uncertainty. More than a third of landlords with buy-to-let mortgages plan to remortgage or switch products in the next year. Fixed-rate deals remain the most popular, with 67% preferring them – split between two- and five-year fixes.
However, regulatory change casts a shadow. The proposed abolition of Section 21 ‘no-fault’ evictions tops landlords’ concerns, ahead of wider Renters’ Reform legislation.
EPC FEARS
Fears are also mounting over looming changes to Energy Performance Certificates and Minimum Energy Efficiency Standards, with landlords citing cost, unclear timelines, and lack of support as critical pain points.
The findings underscore a sector in transition – leaning into professionalism, but wary of what lies ahead.
CONTINUING EVOLUTION
Grant Hendry, Director of Sales at Foundation Home Loans, said: “The story behind this quarter’s data is one of continuing evolution and resilience within the landlord community.
“Incorporation is no longer a niche strategy, it’s a mainstream structural approach, especially for landlords who are expanding or refinancing. The fact 60% of those planning to buy this year intend to do so through a limited company reflects how embedded this behaviour has become.
“Specialist property investment is also a major theme, and it is interesting to see that larger portfolio landlords are targeting areas such as holiday lets, more than doubling their holdings of these properties.”
RENTAL YIELDS HOLDING UP
And he added: “It’s encouraging to see landlord profitability remaining strong, with rental yields holding up exceptionally well given the broader economic context. With 84% of landlords still making a profit and average yields of 6.3%, the market remains strong, particularly for experienced operators with well-managed portfolios.
“The remortgage opportunity this year remains very real; 38% of landlords with borrowing expect to refinance, many with multiple mortgages to review. That’s a prime opportunity for advisers to deliver solutions that match landlords’ ambitions, particularly those seeking to release equity to grow portfolios.”
“This is a moment where good advice and flexible lending can make all the difference. We’re committed to supporting advisers in delivering both.”
