Professionalism in the private rental sector has continued to "gather momentum" in the first quarter of the year, following shifts in portfolio composition and property types, Foundation Home Loans has found.

The lender’s latest landlord trends research revealed that 60% of landlords looking to buy a property in the next 12 months intend to do so within a limited company structure.

This is an increase from 36% in Q1 2020.

Foundation added the shift is also reflected in portfolio size, with landlords who have at least one property held within a limited company owning, on average, 14.6 properties, compared to 5.2 amongst those whose entire portfolio is held in their personal name.

The research also found that a growing number of landlords continue to "embrace diversification" through specialist property investment, with 20% of landlords now owning at least one HMO property.

This figure increases to 25% among portfolio landlord borrowers.

Over four in five (84%) landlords are making a profit from their lettings activity, with 17% reporting a large profit and 67% stating they make a small profit.

For portfolio landlords with four or more buy-to-let mortgages, 80% remain in profit despite higher borrowing and expenditure levels.

Director of sales at Foundation Home Loans, Grant Hendry, said that the data shows a quarter of "continuing evolution and resilience" within the landlord community.

He concluded: "Incorporation is no longer a niche strategy, it’s a mainstream structural approach, especially for landlords who are expanding or refinancing. The fact 60% of those planning to buy this year intend to do so through a limited company reflects how embedded this behaviour has become.

"Specialist property investment is also a major theme, and it is interesting to see that larger portfolio landlords are targeting areas such as holiday lets, more than doubling their holdings of these properties.

"It’s encouraging to see landlord profitability remaining strong, with rental yields holding up exceptionally well given the broader economic context. With 84% of landlords still making a profit and average yields of 6.3%, the market remains strong, particularly for experienced operators with well-managed portfolios."

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