The professionalisation of the landlord sector continues to gather pace, with more investors choosing to operate through limited company structures and expanding into specialist property types, according to research by Foundation Home Loans.

The lender’s Landlord Trends Q1 2025 report, compiled by Pegasus Insight, found that 60% of landlords intending to purchase property in the next 12 months plan to do so through a limited company. This shift reflects a broader trend toward incorporation over recent years.

Data shows that the proportion of properties held in limited companies has increased significantly, from 36% in Q1 2020 to 66% in Q1 2025. Among those with at least one property held through a limited company, landlords own an average of 14.6 properties, compared to 5.2 for those who hold all properties in their personal names.

The research also highlighted a growing interest in specialist property investments. One in five landlords reported owning at least one house in multiple occupation (HMO), rising to one in four among portfolio landlords. In addition, 6% said they own at least one holiday let, with that proportion doubling among those with larger portfolios.

On average, landlords with HMOs held 3.6 properties, while those with holiday lets owned 1.6. Among landlords with portfolios of 11 or more properties, 29% owned at least one HMO, and 12% held at least one holiday let.

Rental yields remained stable at an average of 6.3%, just below the peak recorded in Q3 2024. Eighty-four percent of landlords reported turning a profit, with 17% making a large profit and 67% a small profit. For portfolio landlords with four or more buy-to-let (BTL) mortgages, 80% said they remained profitable despite increased costs.

Remortgaging is expected to remain a key focus in 2025. Thirty-eight percent of landlords with BTL borrowing said they intended to remortgage or undertake a product transfer within the next 12 months. Portfolio landlords, on average, plan to refinance three mortgages, and three-quarters said they would select a fixed-rate product. Of those, 32% preferred a two-year fix, while 35% indicated a preference for a five-year fix.

The research also identified key areas of concern. Landlords cited upcoming regulatory changes, particularly the planned removal of Section 21, as their primary worry. Additional concerns included the cost and uncertainty of complying with future energy performance and minimum energy efficiency standards, along with a lack of support for supply improvements.

Grant Hendry, director of sales at Foundation Home Loans, said: “The story behind this quarter’s data is one of continuing evolution and resilience within the landlord community.

“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.”

He added: “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.

“At Foundation Home Loans, we’ve certainly seen growth in holiday let mortgage demand due to a highly competitive product range, with criteria such as the utilisation of high, medium and low rental figures averaged over 39 weeks, maximum £2m loans, limited company availability and early remortgage, with no minimum income requirements.

“Whether it’s holiday lets, HMOs or multi-unit blocks, landlords are clearly broadening their portfolios in ways that demands deeper product expertise and flexible criteria.”

Hendry also noted: “This is where advisers and specialist lenders, like Foundation Home Loans, can offer tangible value through products designed specifically to support this kind of diversification.

“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.”

He concluded: “The remortgage opportunity this year remains very real; 38% of landlords with borrowing expect to refinance, many with multiple mortgages to review.

“That’s a prime opportunity for advisers to deliver solutions that match landlords’ ambitions, particularly those seeking to release equity to grow portfolios.

“This is a moment where good advice and flexible lending can make all the difference. We’re committed to supporting advisers in delivering both.”