According to recent research released by Foundation Home Loans, 22% of landlords now held at least one property within a limited company. Meanwhile, of those intending to buy in the next 12 months, 75% plan to do so through a limited company.
Given these numbers, is the specialist finance industry doing enough to capitalise on this appetite?
Research from Finova reported that 63% of brokers are experiencing increased demand for specialist BTL products, with 75% seeing a particular surge in limited-company BTL products. However, the survey of 200 brokers and 100 lenders also noted that 63% of specialist lenders cited limited broker demand as the main barrier to innovating.
Jason Berry, sales director at Crystal Specialist Finance, said he had seen an uptick in demand for limited-company products. The share is now 10 percentage points higher than in 2024, with the current mix being 46% limited company versus 54% personal ownership.
“Demand is there and growing, particularly from more professional landlords who are thinking long term about tax, leverage and portfolio planning,” said Jason.
Jason explained that some lenders had been seizing the opportunity over the last 12 to 18 months, sharpening prices, broadening criteria and displaying more flexibility for complex borrowers.
However, he continued: “it still feels niche, and the Finova research highlights why.”
Jason noted that while the research found 78% of lenders said their appetite for innovation was higher than two years ago, only 15% were prioritising new product types, with 11% investing in faster decisioning engines.
“That inevitably limits how far they can go in servicing the kind of complex, time-sensitive cases that specialist BTL throws up,” he cautioned.
The Finova study found that 48% of brokers pointed to flexibility for complex borrowers as the biggest area of under-delivery, with 43% also citing speed of service. Meanwhile, 38% of lenders said technology challenges were the biggest barriers to innovation, with 21% channelling investment into broker portals and communication tools.
“Portals are helpful, but they’re not a substitute for agile products, pragmatic underwriting and quick, consistent decisioning,” said Jason.
Louisa Sedgwick, managing director of mortgages at Paragon, noted the impact of taxes on landlord decisions.
“The Autumn Budget saw landlords operating as individuals hit with additional taxation — a two-percentage-point increase on rental income — which is something that is likely to propel the shift towards limited company ownership.”
She continued by suggesting that demographics may also have an impact on demand.
“Our own research reveals that younger landlords and newer entrants to the market are more likely to utilise limited companies and do so earlier on in their landlord careers. Typically, these landlords have smaller portfolios which they expand through financing more simple propositions.”
Tanya Elmaz, managing director of intermediary sales at Together, also reported growing demand for limited-company products.
“The challenge is that many lenders haven’t fully kept pace. While many say their appetite for innovation is stronger than two years ago, only a small proportion are prioritising new product development or improved technology.”
She emphasised the need for lenders and brokers to collaborate in order to ensure innovation matches real-world demand.
She cited the disconnect between brokers and lenders, with the latter tending to make investments in tech rather than new product types or speed improvements.
“Tax changes will only make borrower needs more complex, so this gap could widen if it’s not addressed. The solution lies in collaboration: lenders and brokers need open conversations about priorities, not just technology upgrades,” said Tanya.
Gareth Briggs, head of UK residential at Arc & Co, also noted a surge in demand for BTL limited-company products, which he attributed to a slower sales market and developers needing to retain units.
He suggested that the complexities of limited company borrower needs could pose issues for BTL lenders. Meanwhile, disparities between the portals and processes of different lenders create a challenge to navigate on behalf of borrowers.
“One of the big topics that I think will sneak up on the market soon will be the refinance requirements for the 75%-plus net LTVs with 5-7% arrangement fees added on top,” said Gareth.
“Valuations have been shaky and, from 2028 onwards, unless property values start to pick up, you could see a flurry of 80%-plus LTV deals requiring refinancing, and a lack of products and lenders willing to go to this level.”
However, some commentators do not see the popularity of limited-company products as something new, or an issue that lenders are struggling to keep up with.
“From our vantage point, limited-company structures have long been popular with property investors, so while we haven’t seen a dramatic surge, today’s investors are certainly savvier about the tax and liability advantages they offer,” said Michael Street, founding partner at Word On The Street.
“Lenders are generally catering well to this space and are actively simplifying underwriting for limited-company applications.”
However, Michael did highlight one area of conflict: “Where the challenge lies is in aligning broker demand with lender innovation priorities. Brokers are calling for more flexibility and speed, but many lenders are focusing their investment on communication tools rather than core product or processing improvements.
“Stronger data-driven communication between brokers and lenders would help bridge this gap and ensure the market fully capitalises on the continued appetite for limited-company BTL investing.”
Jason pinpointed three key elements that need to happen to capitalise on the growth of limited companies. The first of these is better joint planning — including workshops and roundtables on limited company BTL, with data on both sides of the table — in order to create products based on demand rather than assumptions.
Second is tech that targets the real bottlenecks, such as decisioning engines, data-led underwriting and automation of document handling and portfolio analysis.
The final element is specialist advice and partnership, with landlords needing joined-up input from a tax adviser, a specialist broker and a lender that understands complex structures.
Jason concluded: “The market is partially capitalising on the rise in limited-company BTL — but the prize is bigger. The lenders that lean into specialist BTL with product agility, smarter tech and genuine collaboration will be the ones that win the next phase of growth.”
