A new report from Foundation Home Loans reveals a significant and accelerating trend among UK landlords: the shift towards owning buy-to-let properties through a limited company. The “Landlord Trends” research shows that one-fifth of all landlords now have at least one mortgage in a limited company structure, a number that jumps to 30% for those with larger portfolios.

This is a stark increase from five years ago, with the proportion of a landlord’s portfolio held in a limited company nearly doubling from 36% in Q1 2020 to 74% in Q2 2025. This move is particularly popular with experienced investors looking to expand and restructure their portfolios.

Why the Shift to a Limited Company?

The primary driver for this change is tax efficiency. For individual landlords, rental income is subject to personal income tax, which can be as high as 45%. In contrast, rental profits for a limited company are subject to Corporation Tax, a much lower rate.

Furthermore, a key change in tax law is that limited companies can still deduct 100% of their mortgage interest as a business expense, whereas individual landlords are only entitled to a 20% tax credit. This provides a significant financial advantage, especially for higher-rate taxpayers with large mortgages.

Other benefits include:

• Asset Protection: A limited company structure separates personal assets from business liabilities.
• Inheritance Planning: It can be easier to pass on a property portfolio by transferring company shares to family members, which can reduce Inheritance Tax liability.
• Reinvesting Profits: Landlords can reinvest profits back into the company to grow their portfolio without incurring personal tax liabilities until they withdraw the funds.

Looking ahead, the trend is set to continue. The research found that 63% of landlords planning to expand their portfolios intend to purchase through a limited company, while none of the landlords already using this structure plan to buy their next property as an individual. This highlights the growing importance of limited company buy-to-let finance and the need for tailored solutions to meet the evolving needs of landlords.