The share of properties held by landlords within limited companies has more than doubled over the course of the last five years, with new purchases now almost exclusively bought within such structures, Foundation Home Loans has revealed.

The firm’s latest landlord research for Q4 2024 showed that 74% of all properties were held within a limited company, compared to 36% in Q1 2020.

Across the same period, the average number of properties held within a limited company increased from 6.3 to 10.6.

Foundation’s survey of 789 landlords also revealed that landlords operating with at least some of their properties in a limited company tend to have "significantly larger portfolios", at around 14.4 on average, compared to those holding all their properties in an individual name, which sits at 5.2 on average.

Furthermore, 22% of landlords now own at least property within a limited company, with 9% holding their entire portfolio this way.

Director of sales at Foundation, Grant Hendry, said: "The shift towards landlords holding their properties within a limited company structure is clear to see from the latest results of our landlord trends report. Indeed, almost all new purchases by landlords are within a limited company, which perhaps tells you all you need to know about the impact of the cut to mortgage interest tax relief on individuals and the need for landlords to incorporate in order not to be hit by this.

"At the same time, landlords of all sizes are recognising the ongoing need for diversification, particularly across property type, which can often deliver a more sizeable rental yield than ‘traditional’ properties."

Foundation also found that a wider number of landlords appear more willing to purchase and hold specialist property types, such as HMOs and MUFBs.

While landlords are still more likely to own terraced houses (62%) and individual flats (52%), 10% now own a block of individual flats.

Hendry added: "One of the ongoing trends we have seen for some time is that of landlords seeking out these different property types, often housing multiple tenants in either HMO or multi-unit freehold block structures, because there is strong tenant demand and due to the allure of higher yields.

"We are likely to see established landlords much more interested in such portfolio diversification."

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