Student and professional landlords are being offered a wider range of limited company buy to let mortgage products, with average rates falling and demand expected to grow ahead of possible tax reforms.
According to Moneyfactscompare.co.uk, there are now 1,730 fixed-rate deals for landlords operating through a limited company, up sharply from 841 a year ago.
This includes 776 two-year and 954 five-year fixed options, showing how lenders have expanded their ranges in response to landlord demand.
The average two-year fixed rate for limited company BTL products has dropped to 5.04%, compared with 6.53% in October 2023 and 5.54% a year ago.
The improvement comes as lenders compete for business amid speculation that the forthcoming Budget which could introduce new taxes on individual landlords.
BTL deals for companies have grown
The platform's finance expert, Rachel Springall, said: "Landlords weighing up their options to reduce costs may be pleased to see the choice of limited company buy to let deals has grown.
"There are now 1,730 fixed rate deals with a term of two- to five-years on the market, up from just 841 back in October 2023."
She added: "The growth should be welcomed in a market that is consistently facing external pressures, but the rumour mill churn in the run-up to the Budget could be causing concern."
Landlords face issues
She warned that one of the most talked-about policy ideas is the potential levying of National Insurance Contributions (NICs) on pre-mortgage profits, which could accelerate the shift towards incorporation among landlords.
Ms Springall explains: "Unlike other reforms that gradually hit landlords, this could become a significant move to lead more landlords into setting up a limited company for their buy to let property portfolio."
The move toward limited company structures has already gathered pace since the phased removal of mortgage interest tax relief between 2017 and 2020.
Many landlords who entered the market after that period have never benefited from the previous relief, but they now face other pressures, from higher borrowing costs to tighter regulation.
Landlords don't understand company structures
However, research from Coventry for intermediaries shows many landlords still misunderstand limited company structures.
It found that 73% of landlords believe at least one misconception about limited company buy to let, with 23% wrongly thinking such mortgages offer fewer tax advantages and 22% assuming property transfers to a company are too costly.
Jonathan Stinton, the lender's head of intermediary relationships, said: "Interest in limited company BTL is growing, and more landlords are exploring incorporation as a way to structure their portfolios more efficiently and future-proof their investments.
"But our research indicates that many may be doing so based on false assumptions or outdated information.”
Student landlords incorporating
Simon Thompson, the managing director of Accommodation for Students, said: "Operating through a limited company not only brings potential tax advantages but also positions landlords to scale more efficiently as market pressures evolve.
"The student rental market is more professional than ever and with the Renters' Rights Bill looming and Budget changes on the horizon, it's the landlords who think strategically — and act early — who will stay profitable."
He added: "It would appear from the growing popularity of landlords incorporating that this is no longer a niche thing to do, it's the new normal."
