Incorporation is becoming an increasingly important strategy for landlords adapting to a changing tax and regulatory landscape, new research from Pegasus Insight has indicated.

A report from the group revealed that 22% of landlords hold at least one rental property within a limited company.

According to Pegasus Insight’s Landlord Trends Report Q3 2025, one in three portfolio landlords now use a mixed-status model, and for those with a limited company structure, around 70% of their portfolio sits within the company.

The report showed that the average number of properties held in a limited company structure has been growing over the last five years, from 6.3 in Q1 2020 to 10.5 in Q3 2025, while the average total mixed-status portfolio size has remained broadly stable over the same period, at around 15 properties.

Pegasus Insight suggested this growth is being driven predominantly by new acquisitions, with landlords choosing to purchase recently added properties through a company rather than transferring older stock.

Founder and director of Pegasus Insight, Mark Long, said landlords are operating in “a very different environment from that of a decade ago”.

“With tax rules continuing to tighten and compliance demands rising, many now see incorporation as the most robust long-term way to run a lettings business,” Long commented.

“But incorporation is not a simple win. It carries costs, introduces additional administrative responsibilities, and, crucially, needs to be considered carefully with a qualified tax adviser. Mortgage brokers cannot and should not provide tax advice, and landlords need specialist guidance before making structural changes to their business.”

Long also suggested that Chanceller Rachel Reeves’ decision in the Budget last week to introduce new higher property tax bands of 22%, 42% and 47% for landlords who hold property in their own names from April 2027 is “likely to accelerate” the move towards company structures.

He also warned: “It also risks penalising the very people who have made up the backbone of the private rental sector for around 30 years: smaller, long-standing landlords who have quietly provided good-quality homes without the resources or scale to absorb repeated policy shocks.

“Incorporation may well be the right answer for some, but Government should be mindful that continually increasing the burden on individual landlords risks pushing more of them out of the sector entirely, at a time when the country can least afford to lose rental supply.”

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