Nearly three-quarters of landlords continue to hold misconceptions about limited company buy-to-let, despite growing interest in the sector, according to new research from Coventry for intermediaries.
THE MOST COMMON MYTHS
The lender’s latest report, The broker’s guide to limited company buy-to-let mortgages, found that 73% of landlords believe at least one myth about incorporation. The most common – held by 23% of respondents – is that limited company buy-to-let mortgages offer fewer tax benefits. In practice, many landlords may benefit from lower corporation tax rates compared with personal income tax.
A further 22% of landlords believe transferring property into a company structure is prohibitively expensive. While costs such as stamp duty and legal fees may apply, Coventry said these need to be weighed against potential longer-term financial gains.
Other misconceptions include the belief that limited company buy-to-let mortgages are always more expensive than standard buy-to-let loans (22%), and that incorporation necessarily imposes excessive administrative burdens (21%).
The research also showed that 48% of landlords believe at least one tax or cost-related myth, while 21% wrongly think only large-scale landlords can benefit from incorporation. A third of landlords cited understanding legal and tax implications as their biggest challenge when considering the switch.
BROKERS’ ROLE IN CHALLENGING MISCONCEPTIONS
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries, said: “Interest in limited company buy-to-let is growing, and more landlords are exploring incorporation as a way to structure their portfolios more efficiently and future-proof their investments.
“But our research indicates that many may be doing so based on false assumptions or outdated information.
“There are real benefits to incorporating, from accessing lower rates of corporation tax and retaining profits within the business, to making it easier to plan for succession or add shareholders in the future. For landlords looking to scale, a limited company structure can offer more control, flexibility, and long-term value.
“This is where brokers can make a real impact. By helping clients understand the full picture, brokers can become long-term strategic partners.
“That kind of clarity builds confidence, simplifies complex decisions, and creates stronger relationships that last well beyond a single transaction.”
Coventry’s report, The broker’s guide to limited company buy-to-let mortgages, is available now.
