More taxation will accelerate shift to limited company BTL property ownership – Sedgwick

This time, it’s a two-percentage-point uplift on rental income on properties held in personal name.

With limited companies subject to corporation tax rather than income tax, the latest increase will likely accelerate the adoption of limited company structures, a trend we explore in our recently published report, How limited ownership is becoming the new normal. 

The report reveals that, today, buy-to-let (BTL) properties are held exclusively in limited companies by almost one in three landlords. With more than a third – 36% – also owning property in both individual name and limited company structures, at least one special purchase vehicle (SPV) has been established by two-thirds of landlords.

Hamptons’ analysis of Companies House data reveals that just over 14,000 SPVs were established by landlords in 2015. In 2024, more than four times that number – 60,000 – were set up and, by February 2025, the number of incorporated BTL businesses totalled more than 400,000, increasing more than fourfold over the past decade.

It’s certainly a trend we have seen at Paragon, and the data chimes with mortgage industry figures that show 85% of new BTL completions by volume were on properties financed in personal name in January 2020. Four years later, that proportion had fallen significantly to 60%.

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An interesting finding of the research undertaken for our report is that younger, newer landlords are increasingly driving the shift towards limited company ownership of BTL property.

Landlords aged 25-34 utilise SPVs to hold an average of 57% of BTL properties, with an additional 43% being held in both limited companies and personal names. At 46%, limited company ownership is lower among landlords aged 35-44, who also have almost one in four – 39% – properties held in either limited companies or their own name.

This trend is broadly evident across all age cohorts, too, with SPV utilisation declining with age.

Holding BTL investments in limited companies is also typically more prevalent amongst those with less time in the market, compared to more experienced lettings business owners.

Landlords with up to five years’ experience keep 80% of their portfolios in limited companies, while the remainder is divided among personal ownership, mixed structures and partnerships. For those with 6-10 years in the market, limited company holdings fall to 40%, drop further to 21% for the 11-20-year group, and sit at just 16% for those with over 21 years’ experience.

Latest change will accelerate shift to limited company ownership

Looking beyond the properties landlords already own, the adoption of limited companies for BTL investment is set to grow in future. Again, younger landlords are likely to be at the forefront of this trend.

When thinking about future purchases, almost two-thirds of landlords plan to use limited companies. This increases to almost three-quarters (73%) of landlords aged 45-54, eight in 10 (82%) landlords in the 35-44 group and 100% of those aged 25-34.

Additionally, a third of landlords (32%) aim to incorporate their existing properties, rising to half among those who have been investing in BTL homes for five years or fewer and two-thirds (67%) of landlords aged 25-34.

The tax creep on income generated from property held in personal name has already shifted landlord behaviour towards limited company ownership. This latest change will only accelerate that transition.

Brokers with expertise in specialist lending and the nuances of incorporation are well-placed to support landlords through this transition. This knowledge helps foster trusted relationships and ensures brokers remain relevant in a rapidly evolving market.