Just 17% of individual landlords owned at least one HMO, compared to 35% of those incorporated. Limited company landlords are also more inclined to increase rents to keep pace with market changes and treat their BTLs as business, rather than a side hustle.
According to data from the latest Landlord Trends series from Pegasus Insight, which captured activity in Q4, 27% of landlords operate as full- or part-time landlords compared to 14% of those holding property in their own name.
Meanwhile, three-quarters of limited company landlords increased rents in the past year, compared to 61% of individual landlords, which Pegasus Insight said suggests a greater responsiveness to market conditions and cost pressures.
Operating on a different scale
More than one in five landlords now hold at least one property within a limited company structure and, according to Pegasus Insight’s data, typically operate their BTL businesses on a bigger scale than landlords who own properties in their own name.
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Analysis of the number of properties held by each type of landlord revealed that limited company investors held on average 15.9 properties, compared to 4.9 by individual landlords.
Mark Long, managing director and founder of Pegasus Insight, said: “Limited company landlords are operating at a different scale, with different funding models and different levels of engagement in the market.
“They tend to run larger, more leveraged and often more complex portfolios, which naturally creates a different risk profile and a different set of support needs.
“For lenders and policymakers, this is important, as it shows the private rented sector is no longer a single, uniform market.
“Ownership structure is becoming an increasingly important lens through which to understand landlord behaviour, resilience and even future supply.”
Analysis by Paragon Bank revealed the growing popularity of the use of limited company structures to purchase BTL properties. The proportion of BTL completions made using a limited company vehicle accounted for 43% of mortgaged BTL house purchases last year, a rise from 35% in 2024.
The proportion of BTL completions made via a limited company has been rising steadily since 2018, when a new, more punitive tax regime was ushered in in stages, when it made up just 7.5% of completions.
