Landlords are increasingly turning to limited company structures to manage their buy-to-let portfolios, as tax changes and regulation drive a more professional approach to property investment.
New research from Coventry for intermediaries reveals that nearly three quarters of limited company landlords entered the market within the past five years, with half of all landlords now planning to expand their portfolios in the near term.
The trend marks a notable shift in landlord behaviour, with tax efficiency cited as the main reason for incorporation by 41% of respondents. With changes to Capital Gains Tax and the ongoing evolution of the Renters Reform Bill, the appeal of a more structured, corporate approach is clear, the lender says.
Coventry’s Broker’s guide to limited company buy-to-let mortgages highlights how this shift is being felt at intermediary level. 90% of brokers say they have advised on limited company buy-to-let over the past three years – a dramatic rise from just 25% a decade ago.
LANDLORD-BROKER DIVIDE
Despite this, there remains a significant gap between landlord appetite and broker involvement. Only 35% of landlords arranged their most recent limited company buy-to-let mortgage through a broker, and 45% went directly to a lender.
This disconnect suggests many landlords could be navigating incorporation and portfolio expansion without tailored professional support.
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries, believes this presents a key opportunity for brokers to offer more than just mortgage placement.
“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 buy-to-let. That’s a golden opportunity for brokers to deepen relationships and offer real value,” he said.
The research also highlights how larger landlords are leading the shift. Nearly half – 47% – of those with four or more properties have incorporated within the past five years, compared with 30% of landlords with one to three properties.
HURDLES NEED TO BE OVERCOME
However, barriers remain, with 33% citing difficulty in understanding the legal and tax implications of incorporation as a major hurdle.
Sarah Brown, senior mortgage proposition manager at Coventry for intermediaries, said brokers are facing a more informed and demanding client base.
“More landlords are moving over to limited company buy-to-let, so they’re asking tougher questions about tax planning, structure and long-term planning,” she said.
“We’ve listened closely to what brokers are telling us and built our limited company buy-to-let proposition around that.
“By combining simplicity, service and expertise we’re helping brokers deliver better outcomes – and grow their business along the way.”
