Buy-to-let finance is undergoing one of its most significant changes in decades. Tax reform, rising compliance demands and a more professional landlord base are reshaping not only how investors structure their portfolios, but the products and lenders they now rely on.
The result is a market that is moving away from simple, off-the-shelf borrowing and towards tailored structures that resemble small-business finance rather than traditional residential lending.
Incorporation becomes the new normal
Recent market research shows that just over one in five landlords already hold at least one rental property in a company structure, and nearly three-quarters of investors who plan to make a purchase in the next 12 months say they will do so via a company.
The shift is not being driven by mass transfers of older stock, as the tax and stamp duty costs are often prohibitive, but by new purchases. And, for portfolio landlords, limited-company structures now account for the majority of their holdings, and mixed-status portfolios (combining personal and company assets) are becoming standard.
Tax is a major driver of this process. With higher property-specific tax bands for personally-held investments scheduled to take effect in 2027, incorporation enables landlords to offset mortgage interest and manage profits more efficiently. But the trend also reflects how landlords now view themselves: not as passive asset owners, but as running a long-term business with formal structures, governance and financial strategies.
Growing portfolios, growing sophistication
The average landlord portfolio is also larger, more diverse and considerably more valuable than it was five years ago. Research reveals that the typical landlord now has a portfolio worth well over £1m, which generates tens of thousands in gross annual rent.
And larger investors are no longer confined to traditional single-family homes; many own HMOs, semi-commercial stock, mixed-use assets, or properties with non-standard construction.
This diversification is changing borrowing requirements. One in ten landlords currently has a specialist buy-to-let mortgage – covering anything from multi-occupancy units to semi-commercial blocks – and a growing number expect to use one in the year ahead. Among landlords with 20 or more properties, the proportion planning to take out a specialist product rises markedly, reflecting wider adoption of professional-grade financing.
Why specialist lending is becoming essential
The specialist market has expanded to meet the needs of landlords who are seeking higher yields through multi-occupancy and mixed-use assets. They are also recycling capital to fund acquisitions and want lenders who understand layered structures – SPVs, cross-charging and interlinked company ownership.
Specialist lenders can now underwrite these kinds of complex arrangements and will look beyond standard criteria to assess business plans, rental stress testing across diversified portfolios, and long-term investment strategies rather than single-asset snapshots.
And demand for these types of products is growing, with around 40% of landlords expecting to remortgage or complete a product transfer within the next year, and a third planning to release equity from existing properties to fund further expansion.
