Limited company landlords accounted for a record proportion of house purchase transactions funded with a buy-to-let (BTL) mortgage in 2025, according to research by Paragon Bank.

Analysis of industry data by Paragon revealed that limited companies accounted for 43% of mortgaged BTL house purchases last year, up from 35% in 2024.

Paragon noted that the proportion of mortgage completions made through a limited company has risen steadily since 2018, when they accounted for just 7.5% of completions.

The proportion of completed BTL remortgages via limited company landlords also increased during the year, accounting for 11.5% of transactions, up from 10% in 2024 and 1.3% in 2018.

Landlords have increasingly utilised limited company structures following changes to the tax treatment of rental income in 2017, which resulted in being taxed on gross rental income. Before April 2017, landlords who held property in their personal name could deduct mortgage interest and finance costs from rental income – an allowance that was phased out and replaced with a 20% tax credit.

“The continued rise in limited company BTL activity reflects the structural shift we’ve seen in the market since the 2017 tax changes,” managing director of mortgages at Paragon, Louisa Sedgwick, said.

“As landlords have adjusted to being taxed on gross rental income, incorporation has become an increasingly attractive and often necessary route to maintain profitability.

“Limited company structures can potentially not only offer more efficient tax treatment but also provide greater flexibility for portfolio growth and long term planning. The record share of purchases and remortgages completed through limited companies in 2025 underlines how deeply this trend is now embedded in the sector, and it is one we anticipate will continue.”

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