The increase in buy-to-let (BTL) held in limited companies seen over the past decade has been driven by younger, newer landlords buying property within a company structure from the outset, Paragon Bank has revealed.

The bank’s latest survey, which was part of its new report titled ‘How limited company ownership is becoming the new normal’, found that 29% of landlords hold their properties exclusively via a limited company structure.

Meanwhile, 36% split ownership between corporate entities and personal names, and 65% have created as least one special purpose vehicle for their BTL investments.

However, Paragon’s research suggested that a new generation of landlords is helping to drive this shift, opting for limited company ownership from the outset.

Among landlords aged 25 to 34, 57% of properties are held in limited companies, while 43% are owned through a mix of corporate and personal names.

In the 35 to 44 age bracket, limited company holding fall to 46%, with another 39% mixed, placing them just behind the youngest group in SPV adoption. The bank added that this is something that broadly declines as landlords age increases.

Paragon stated that limited company ownership is highest among the newest landlords and falls with experience, mirroring the pattern seen when the cohorts are viewed by age.

Those in the market for five years or less hold 80% of their portfolios in limited companies, with the rest split between personal name (11.5%), mixed ownership (7.5%) and limited liability partnership (1%).

The share of properties help in SPVs drops to 40% for landlords with six to 10 years’ experience, 21% for those in the 11 to 20 year bracket, and just 16% among the most seasoned operators who boast 21 or more years of experience.

Managing director of mortgages at Paragon Bank, Louisa Sedgwick, said that the last 10 years has seen more landlords opt to hold their BTL properties in limited companies, in a bid to mitigate the impact of tax changes.

She concluded: "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.

"This is something we’ve seen more of and recent enhancements to our mortgage application system are supporting these landlords. We’ve streamlined applications for simple BTL cases, significantly cutting the number of supporting documents we ask for and speeding up the journey.

"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. 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."

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