A new generation of landlords is driving the surge in buy-to-let properties held through limited companies, opting for corporate structures from day one rather than switching later in their careers.
Research from Paragon Bank reveals that nearly one in three landlords now hold their properties exclusively via limited companies, while another 36% split ownership between corporate entities and personal names. Overall, 65% of landlords have created at least one Special Purpose Vehicle (SPV) for their buy-to-let investments, according to the survey of over 500 landlords.
Age emerges as a clear factor in ownership preferences. Among landlords aged 25-34, 57% of properties sit in limited companies, with the remaining 43% owned through a mix of corporate and personal names. The 35-44 age bracket shows 46% in limited companies, with another 39% mixed, placing them just behind the youngest cohort in SPV adoption. This trend broadly declines as landlord age increases.
Experience levels mirror the age-based pattern. Landlords active for five years or less hold 80% of their portfolios in limited companies, with the remainder split between personal ownership (11.5%), mixed structures (7.5%) and limited liability partnerships (1%). However, the share of SPV-held properties drops sharply to 40% for those with six to 10 years of experience, falling further to 21% in the 11-20 year bracket and just 16% among landlords with over two decades in the market.
"In a bid to mitigate the impact of tax changes introduced in the latter half of the previous decade, the last 10 years have seen more and more landlords opt to hold their buy-to-let properties in limited companies," said Louisa Sedgwick, managing director of mortgages at Paragon Bank (pictured)
"Interestingly, our research shows that younger and newer landlords are more likely to structure their portfolios this way and do so earlier on in their landlord careers."
The bank has responded by streamlining its mortgage application system for simple buy-to-let cases, significantly reducing documentation requirements and accelerating processing times."
"In part, I think that these landlords benefit from more advice and education on the benefits and key considerations than those who came before them," Sedgwick added. "With some of our older, more experienced landlords perhaps eyeing retirement, helping the next generation of landlords to succeed is vital so this support can only be a good thing."
