Over the past five years, landlords have more than doubled their share of property holdings in limited liabilities, and landlords have now purchased new landlords almost exclusively within such structures.
According to the Foundation Home Loan Landlord Research, the study showed that 36% of all properties were held in limited companies in the first quarter, and the figure increased to 74% in 2024.
On the same time scale, the average number of properties within a limited liability company increased from 6.3 to 10.6.
Landlords who own at least some of their properties in a limited company tend to have a larger portfolio (14.4 on average) than if they were under a personal name (5.2 on average).
Now, about 22% of landlords own at least one property within a limited company, and 9% of them hold their entire portfolio in this way.
These results are from the 4th quarter 2024 Landlord Trends report conducted by Pegasus Insight on behalf of Foundation Home Loans, which consists of 789 online interviews conducted between June and July 2024.
According to the foundation, the results show that landlords are increasingly seeking mergers and are now more likely to own large amounts of property within this structure, indicating a further trend in the industry’s specialization.
Lenders believe that specialization and more portfolio landlords are also shown extensively in the types of real estate purchased and rented.
Now, one in five landlords own HMO properties in their portfolio, with an average of 3.1, which increases to 29% of all larger landlords, classified as landlords with more than 11 properties in their portfolio.
The number of landlords with holiday rental properties is now 6%, with an average of 1.6, while the percentage of larger landlords is 12%.
The foundation says it continues to see more landlords prefer to buy and hold specialty property types such as HMO and multi-unit blocks. Although landlords are still more likely to own terraced houses (62%), while single apartments (52%), 10% of houses now have a single apartment block.
Grant Hendry, Director of Sales at Foundation Home Loans, commented: “It can be seen from the latest results of our landlord trend reports that the transition to landlords who own their property is evident.
“Indeed, almost all new purchases from landlords are in a limited company, maybe telling you that you need to understand the impact of cutting mortgage interest tax relief on individuals and landlords’ needs to avoid getting hit that way.
He added: “At the same time, landlords of all sizes recognize the ongoing demand for diversity, especially across property types, which can often provide greater rental benefits than “traditional” properties.
