"The buy-to-let market is still booming, and a recent study from Fleet revealed portfolio landlords are prominent, with around 61% of applications coming from those who hold four or more properties"
- Rachel Springall - Moneyfactscompare
Landlords looking to invest through limited companies are benefiting from a wider range of buy-to-let mortgage options and lower borrowing costs, according to Moneyfactscompare.co.uk. Analysts suggest this trend may continue, particularly if anticipated Budget changes become reality.
The number of fixed buy-to-let mortgages available to limited companies has expanded significantly in recent years. There are now 776 two-year and 954 five-year fixed-rate deals, giving a combined total of 1,730 options, up from 841 in October 2023.
Rates have also fallen. The average two-year fixed rate for a buy-to-let mortgage via a limited company is now 5.04%, down from 6.53% in October 2023 and 5.54% year-on-year. This increased choice and lower cost is expected to support landlords navigating a market facing ongoing economic pressures.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said, “Landlords weighing up their options to reduce costs may be pleased to see the choice of limited company buy-to-let deals has grown. There are now 1,730 fixed rate deals with a term of two to five years on the market, up from just 841 back in October 2023. The growth should be welcomed in a market that is consistently facing external pressures, but the rumour mill churn in the run-up to the Budget could be causing concern.
“One of the most worrying rumours circulating over recent weeks is the idea of levying National Insurance Contributions (NICs) on pre-mortgage profits. Unlike other reforms that gradually hit landlords, this could become a significant move to lead more landlords into setting up a limited company for their buy-to-let property portfolio. This has been a growing trend over recent years due to reductions in mortgage interest tax relief, which was gradually phased out between 2017 and April 2020. Due to this, new landlords might never have had this relief, but that does not mean they are not facing their own challenges to turn a profit on their investment.
She added, “It is essential that landlords seek independent advice to ensure they are as prepared as possible for any fundamental changes that may be announced in the coming months. The ongoing review of the Renters’ Rights Bill touches on both no-fault evictions and requirements surrounding lettings, heat, and safety requirements, which will need to be carefully digested. However, the buy-to-let market is still booming, and a recent study from Fleet revealed portfolio landlords are prominent, with around 61% of applications coming from those who hold four or more properties. It may then not be too surprising to see a dominance in limited company applications, recorded as 81% throughout the third quarter of 2025.
“Landlords may find it encouraging to see the cost of using a limited company buy-to-let has fallen over the past two years, thanks to falls to the Bank of England Base Rate and lower swap rates. The average two-year fixed rate is now 5.04% for a buy-to-let mortgage available to limited companies, down from 6.53% in October 2023. Year-on-year, the two-year rate is down from 5.54%. The future expectation for rate cuts remains uncertain, but it is hoped that lower borrowing costs could still encourage investors. Those who do already have a portfolio and do not feel the return on their investment will be sustainable must ensure they understand the costs involved in exiting the market, such as agent fees and Capital Gains Tax (CGT).
Springall concluded, “The past few years have been challenging for landlords due to inflationary pressures, but that does not necessarily mean that these rising costs have been directly passed onto tenants. Rental growth has now lagged behind inflation (CPI) for nine consecutive months, according to Hamptons. Wider economic pressures continue to impact the rental market, so there is a careful balancing act for landlords to both meet their desired profit margin, while also ensuring they charge their tenants fairly. Ultimately, keeping valuable tenants and keeping properties occupied will be essential in the months ahead."
