Landlords are continuing to shift towards specialist BTL properties in a bid to boost portfolio diversification, according to new research from Foundation Home Loans.
The firm’s Q3 2025 Landlord Trends research, conducted by Pegasus Insight, found one in 10 landlords now hold a specialist BTL product.
This is set to increase, with one in seven expected to apply for a specialist BTL loan within the next 12 months. This rises to over one fifth for larger landlords with over 20 properties.
Additionally, the research found evidence of a continued shift towards structured and sophisticated portfolio management with the continued uptake of limited company ownership.
The research shows 22% of landlords now hold at least one property within a limited company - up by 2% - with 70% of their portfolio incorporated. Among those intending to buy in the next 12 months, 75% plan to do so through a limited company - a new record high.
The data suggests this is being driven by new acquisitions rather than landlords transferring existing stock, underlining the strategic nature of the shift.
Profitability and yield performance across the sector also remain strong. Landlord profitability has reached a six-year high, with 89% of landlords reporting a profit from their lettings activity and only 4% currently loss-making.
Average rental yields have climbed to 6.6%, beating the previous 10-year record, while the typical landlord portfolio is now worth £1.77m and generates a gross annual income of £79,000.
“The latest data shows a market evolving rapidly towards greater sophistication,” said Grant Hendry, director of sales at Foundation Home Loans.
“It reflects a sector that is thinking strategically about portfolio diversification, long-term value and the type of products they are going to require going forward.
“With the Renters’ Rights Bill now enacted, landlords are facing another period of adjustment, but the majority remain confident in their ability to operate successfully - brokers have a vital role in helping them navigate this new landscape and ensure their lending and property strategies remain aligned with the opportunities ahead.”
