The BTL Barometer from Kensington Mortgages, which surveys landlords who hold a portfolio of properties in a limited company, shows renewed confidence, with 77% thinking property prices will increase and 80% expecting rental demand to rise. Nearly nine in 10 – 89% – of all landlords said they felt confident about the outlook for the year ahead.
Allison Buckley, CEO of Kensington Mortgages, said: “The latest findings from our BTL Barometer underline the resilience and professionalism of today’s limited company landlords.
“Despite experiencing higher operating expenses and anticipating increased mortgage costs and greater regulatory complexity ahead, landlords remain firmly committed to the sector – underpinned by strong tenant demand and expectations of improving yields.
“What’s particularly notable is that confidence is not translating into complacency. Many landlords are actively reviewing and diversifying their portfolios, with growing interest in corporate lets and larger HMOs, demonstrating a clear focus on long-term income and adaptability.”
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Costs to increase
Despite this optimism, landlords are also bracing themselves for challenges. Over three in four (77%) expect mortgage costs to increase, while 81% report that their running costs – including repairs, insurance, utilities, and maintenance – have risen over the past year. Meanwhile, nearly four in five (79%) believe the regulatory environment will become more challenging.
Landlords were concerned about regulation, property prices and rental demand, as well as the wider economic outlook. However, their biggest worry is interest rates – which may now stay higher for longer due to the Iran war.
Strategies hold firm
Most landlords are holding firm on their investment strategies. Over half (53%) plan to maintain the size of their portfolio over the next 12 months, while almost four in 10 (38%) intend to expand. Just 8% are considering reducing their holdings. Encouragingly, most landlords (74%) said they currently find it easy to access BTL mortgage financing.
This is in contrast to other studies showing that smaller landlords in particular are considering selling up due to regulation including the Renters’ Rights Act, which comes into force in May. A study from Pepper Money found that an estimated 220,000 privately rented households are expected to exit the market by the end of 2026, based on landlords intending to dispose of properties. It also found that smaller landlords were most likely to leave the sector.
Higher yield from limited companies
The Kensington study also showed that landlords were receiving higher yields in the limited company structure. Landlords who also had personal holdings as well as limited company portfolios reported gross rental yields of 5.04% from their limited company portfolios on average, compared to 4.88% from personally held properties, highlighting the financial advantages of the limited company structure.
Residential properties for families are the most common asset type (40%) in landlords’ portfolios, followed by houses in multiple occupation (HMOs) with six bedrooms or more (35%), single-tenant residential properties (33%), and HMOs with fewer than six bedrooms (27%), with holiday (16%) and student lets (12%) proving less popular options. In recent years, landlords report primarily increasing their holdings of family homes (21%), single-tenant homes (20%), and HMOs with six or more bedrooms (16%).
Buckley added: “Many landlords are actively reviewing and diversifying their portfolios, with growing interest in corporate lets and larger HMOs, demonstrating a clear focus on long-term income and adaptability.
“The limited company structure continues to play a central role in this evolution, with yields marginally higher on company-held portfolios compared to personal holdings. As the market continues to evolve, specialist lenders have an important role to play in providing the flexible, tailored financing solutions that professional landlords need to navigate change and seize opportunity.”
