Limited company landlords hold three times more properties

Landlords using limited companies now control portfolios that are more than three times larger than those holding rented property in their own name, research reveals.

According to Pegasus Insight, this highlights a widening structural split across the private rented sector.

The data shows that 21% of landlords operate at least part of their portfolio through a limited company.

The firm’s latest Landlord Trends report indicates that incorporation has edged upward rather than accelerating sharply.

Limited company landlords hold an average of 15.9 properties, while individual landlords, by comparison, manage 4.9 on average.

Incorporated landlord portfolios

The firm’s founder and chief executive, Mark Long, said: “This isn’t about a sudden surge into incorporation, but about a steady structural divergence.

“Limited company landlords are operating at a different scale, with different funding models and different levels of engagement in the market.

“They tend to run larger, more leveraged and often more complex portfolios, which naturally creates a different risk profile and a different set of support needs.”

He added: “For lenders and policymakers, this is important, as it shows the PRS is no longer a single, uniform market.

“Ownership structure is becoming an increasingly important lens through which to understand landlord behaviour, resilience and even future supply.”

Rely on BTL finance

The research also shows that finance arrangements differ too with 69% of incorporated landlords are relying on buy to let mortgage borrowing.

For landlords holding personal assets, the ratio is 57%.

Also, 35% of limited company landlords own at least one House in Multiple Occupation, compared with 17% among individual landlords.

Work full or part-time

The firm has also found that among landlords operating through companies, 27% identify as full- or part-time.

For landlords holding property in their own name, the figure is 14%.

When it comes to setting rents, three quarters of limited company landlords increased rents in the past year, compared with 61% of individual landlords.

Important context: Property118 is not currently recommending Section 162 incorporation for landlords with mortgages while legal uncertainty remains over the treatment of mortgage liabilities. Read our current position here: Why Property118 is not currently recommending s162 incorporation to landlords with mortgages

A conversation worth having?

If you are weighing up your own strategy, whether that’s to sell, expand, or restructure to improve profitibility, it is worth having a discussion with a Property118 consultant to take a closer look at how your portfolio is structured as a whole now, and to forecast the outcomes based on multiple scenario’s.

These conversations are typically most useful for landlords with established portfolios and relatively modest borrowing who are beginning to reflect on how their assets could work more effectively in the years ahead.