The rise of limited company buy-to-let: Why landlords are reshaping their portfolios through corporate structures

It wasn’t that long ago that limited company buy-to-lets were viewed as a niche strategy used by a relatively small subset of landlords. 

However, over the past decade, they have become key vehicles used by landlords looking to run their portfolios in a tax-efficient way.

Their growth has been remarkable. Over the past decade, the number of registered buy-to-let companies has soared four-fold with 66,587 registered in 2025 alone, bringing the total to 443,272. That makes them the most popular type of limited company in operation in the UK today. In fact, there are nearly four times as many buy-to-let companies operating than either fast food takeaways or hairdressers, according to estate agents Hamptons. 

But what is driving landlords to incorporate? What types of structures are they using? And what do brokers need to know when submitting limited company buy-to-let cases?

The key drivers behind incorporation

The primary catalyst behind the surge in limited company ownership has been taxation. 

In the Summer 2015 Budget, the Chancellor introduced restrictions on mortgage interest relief for individual landlords under Section 24 of the Finance Act.

Prior to that change, landlords holding properties in their own name could deduct their full mortgage interest payments from their rental income before working out the tax they owed. Instead, landlords now only receive a tax credit worth 20% of their mortgage interest payments. 

This change has hit higher-rate and additional-rate taxpayers hardest. It means that landlords are now effectively taxed on their full rental income, after allowable expenses and the 20% credit. In many cases this resulted in higher effective tax bills and, in some instances, pushed landlords into higher tax brackets altogether.

Crucially, the restrictions were not applied to landlords holding their properties in a limited company structure, meaning they can continue to treat mortgage interest as a fully deductible business expense. 

Combined with the ability to retain profits within the business and control the timing of income extraction, this has made corporate ownership an attractive alternative for many investors.

As a result, incorporation is now commonplace among new entrants to the sector. Industry estimates suggest that upwards of 75% of new buy-to-let purchases are being completed through limited companies, particularly among younger and more professionally minded landlords.

Types of buy-to-let limited companies

The phrase ‘limited company’ is a widely used catch-all term to describe corporate ownership of properties. But in reality, there are numerous different structures that landlords can use. 

Special purpose vehicle (SPV)

By far the most common is the special purpose vehicles (SPV), which are companies formed solely for the purpose of holding and managing property.

SPVs are popular for several reasons. Firstly, they are quick and easy to establish and are widely accepted by lenders. This is because the company’s activities are limited to property investment, so they are easy to underwrite. 

They also offer some financial planning advantages, as retained profits can be reinvested into additional acquisitions without any personal tax implications. Directors can also determine how and when they extract income, allowing them to reduce their tax liabilities.

In many cases, the shareholders will be the property owners. But in some more complex structures, they can be a holding company or even a family trust set up for succession and estate planning purposes.

Trading limited companies

While SPVs are by far the most popular vehicle among landlords, some hold their properties in trading limited company structures. For example, a consultancy or a retailer may use surplus profits to buy a rental flat within its existing corporate entity.

From a legal perspective, this is perfectly fine. However, lender appetite for this type of structure is far more limited as the presence of non-property trading activity makes them much more complex to underwrite. As a result, landlords using this structure may find themselves restricted to a smaller pool of lenders.

Limited liability partnerships

Some landlords also use the limited liability partnership (LLP) structures. This is especially the case where family members combine to buy a property or if the company is an accountancy firm or group of solicitors.

While an LLP structure can be more flexible, like trading limited companies they are harder to underwrite. Lenders must assess the financial standing and liabilities of each partner and they often require personal guarantees for the debt. As a result, few lenders, except for specialists such as Keystone, will lend against them.

Unlimited companies

Finally, there is the unlimited company, although these are incredibly rare. In fact, in the eight years since Keystone launched, we have only received a handful of these cases. 

An unlimited company is almost identical to its sibling, the limited company, except shareholders’ liability is not capped. This means that if the company fails and cannot cover its debts, the creditors can look to the shareholders' personal assets to settle the balance. 

One of its benefits is privacy, as these companies do not have to file annual accounts with Companies House. However, their relative rarity means they are seldom used and are unlikely to fall within the criteria of many mainstream lenders.

Things to remember when submitting limited buy-to-let company cases

Limited company cases involve much more packaging than cases involving individual borrowers.

Underwriters look for consistency between the application, the company's filing at Companies House and the personal standing of the directors. Therefore, as a broker, you need to be armed with this information for the application.

For SPVs, one of the first things to check is the Standard Industrial Classification (SIC) codes. Most lenders will only accept specific property-related codes, such as 68100, 68209 or 68320. If your client has registered under a different code, it can lead to delays or even declines.

It’s also important that you find out as much detail as possible not just about the company itself but also its shareholders. Use Companies House and other company search tools to identify whether the property owners have any links to other businesses and if there are any outstanding defaults or CCJs linked to these companies. Lenders will check this, so having this information to hand early will help the application.

Where a company has multiple shareholders, it is important to understand who holds voting rights. This is important as it determines who has significant control and, ultimately, whose name or names will go on the application. Sometimes, more complex ownership can be represented by A, B and C shares, colloquially referred to as Alphabet Shares. It is important to understand the significance of these different shares in terms of voting, equity and dividend distribution.
 
As more landlords move towards corporate ownership, limited company buy-to-let cases are becoming a routine part of broker workflows. Therefore, brokers who take the time to understand the nuances of corporate ownership will be better equipped to navigate complex cases and secure the best outcomes for their clients.