Incorporation is becoming an increasingly important strategy for landlords adapting to a changing tax and regulatory landscape, Pegasus Insight reveals.
Data from the Landlord Trends Report Q3 2025 shows 22% of landlords hold at least one rental property within a limited company.
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 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.
Meanwhile, the average total mixed-status portfolio size has remained broadly stable over the same period at around 15 properties.
The research shows that 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.
This structural shift reflects the increasing pressures landlords face, Pegasus says, as tax policy, running costs and legislation evolve.
Pegasus Insight founder and director Mark Long says: “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.”
“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.”
“The Chancellor’s decision in the recent Budget 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 only likely to accelerate the move towards company structures.”
“But it also risks penalising the very people who have made up the backbone of the PRS 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.”
