Landlords are increasingly turning to limited company structures as a way to manage rising tax and regulatory pressures, research from Pegasus Insight reveals.

The firm’s Landlord Trends Report Q3 2025 shows that 22% of landlords now own at least one rental property within a company, reflecting a continued shift towards incorporation.

Among portfolio landlords, one in three operates a mixed-status model, and those using a company structure now hold an average of 70% of their portfolio within that entity.

While overall portfolio sizes have remained largely unchanged at around 15 properties, the number held within companies has risen steadily, increasing from an average of 6.3 in early 2020 to 10.5 in the third quarter of this year.

The research indicates that this expansion is being driven mainly by new acquisitions made through corporate vehicles rather than the transfer of existing stock.

Pegasus Insight said the trend points to growing operational pressures across the private rented sector as tax rules tighten, running costs rise and compliance demands

NOT A SIMPLE WIN

Mark Long (main picture, inset), founder and director of Pegasus Insight, said: “Landlords are operating in a very different environment from that of a decade ago. With tax rules continuing to tighten and compliance demands rising, many now see incorporation as the most robust long-term way to run a lettings business.

“But incorporation is not a simple win. It carries costs, introduces additional administrative responsibilities, and, crucially, needs to be considered carefully with a qualified tax adviser.”

BROKER WARNING

And he added: “Mortgage brokers cannot and should not provide tax advice, and landlords need specialist guidance before making structural changes to their business.

“The Chancellor’s decision in the recent Budget to introduce new higher ‘property’ tax bands of 22%, 42% and 47% for landlords who hold property in their own names from April 2027 is only likely to accelerate the move towards company structures.

“But it also risks penalising the very people who have made up the backbone of the PRS for around 30 years: smaller, long-standing landlords who have quietly provided good-quality homes without the resources or scale to absorb repeated policy shocks.

“Incorporation may well be the right answer for some, but government should be mindful that continually increasing the burden on individual landlords risks pushing more of them out of the sector entirely, at a time when the country can least afford to lose rental supply.”