The proportion of incorporated property held within portfolios of landlords who utilise companies has more than doubled since the first quarter of 2020, Paragon Bank has revealed.

The bank’s latest research, conducted by Pegasus Insight, found that 12% of landlords use a mix of individual and limited company ownership.

Of those, an average of 76% of the portfolio, or 13.1 properties, were incorporated at the end of Q3 2024.

This was an increase from an average 36% of portfolios, or 6.3 properties, that were incorporated in Q1 2020, and nine properties during the same quarter in 2023.

According to the research, individual ownership remains the most prevalent structure with 79% of landlords holding their portfolios in their own name. The remaining 9% is made up of landlords who have incorporated their entire portfolios.

Paragon Bank said these figures represent the average across all portfolio sizes, noting that limited ownership is more prevalent among landlords with larger portfolios.

The research revealed that 7% of landlords with between one and three buy-to-let mortgaged properties have incorporated their entire portfolios. This increased to 28% among those with four or more, skewing the average number of properties held in limited companies compared to the overall average portfolio size.

Managing director for mortgages at Paragon Bank, Louisa Sedgwick, said: "The trend towards holding properties in limited companies doesn’t seem to be slowing down. In fact, these figures show that it’s actually growing among landlords who have found it can deliver benefits, particularly around how much their income is taxed.

"Despite this, we see that the majority of properties, 79%, are owned solely in individual names, hinting at the potential opportunities for limited company lending business. Brokers can add another string to their bow by generally upping their knowledge of what’s involved and, more specifically, the lenders who are good at managing this type of application and their criteria.

"Incorporating portfolios isn’t going to be the best move for all landlords so we’d always recommend that they seek professional advice, typically from a tax adviser or accountant."

---