"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"
- Grant Hendry - Foundation Home Loans
The professionalisation of the private rental sector continues to gather momentum as the latest Q1 2025 Landlord Trends research, conducted by Pegasus Insight on behalf of Foundation Home Loans, reveals further shifts in portfolio composition, property types, and borrower behaviours amongst UK landlords.
The latest data shows that 60% of landlords intending to buy a property within the next 12 months plan to do so through a limited company structure. Over the past five years, the proportion of properties held within limited companies has risen sharply - from 36% in Q1 2020 to 66% in Q1 2025.
This shift is also reflected in portfolio size, with landlords who have at least one property held within a limited company owning, on average, 14.6 properties, compared to 5.2 amongst those whose entire portfolio is held in their personal name.
A growing number of landlords continue to embrace diversification strategies through specialist property investment. The research finds one in five landlords now own at least one HMO property, rising to one in four amongst portfolio landlord borrowers.
In addition, 6% now hold at least one holiday let, with that figure doubling amongst landlords with larger portfolios. The average number of HMOs held is 3.6, while those with holiday lets own 1.6 on average. Among larger landlords - those with 11 or more properties - 29% have an HMO, and 12% have a holiday let within their portfolio.
The research also confirms the strong performance of landlord portfolios, even amidst increasing costs and regulatory changes. The average rental yield remains at a robust 6.3%, just 0.2% below the 10-year high recorded in Q3 2024.
Overall, 84% of landlords are making a profit from their lettings activity, with 17% reporting a large profit and 67% a small profit. For portfolio landlords with four or more buy to let mortgages, 80% remain in profit despite higher borrowing and expenditure levels.
Remortgage activity is expected to remain strong through 2025, with 38% of landlords with buy to let borrowing intending to remortgage or carry out a product transfer in the next 12 months.
Portfolio landlords expect to refinance three mortgages on average, and three-quarters of landlords say they will opt for a fixed rate. Of those choosing a fixed deal, 32% anticipate selecting a two-year fix and 35% favour a five-year fix; Foundation Home Loans said this highlighted the demand for flexibility amid interest rate uncertainty.
The research also captures the mood of the landlord community in the face of regulatory change. Reform of possession laws - particularly the proposed removal of Section 21 - is landlords’ chief concern, more so than the Renters’ Rights Bill as a whole.
There is also mounting concern about future Energy Performance Certification requirements and the proposed Minimum Energy Efficiency Standards. Landlords cite three core issues of concern: the cost of compliance, uncertainty around timescales, and the perceived disconnect between regulation and support for the supply side of the PRS.
“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," explained Grant Hendry, director of sales at Foundation Home Loans. "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,"
“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."
He added, “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. 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.
Hendry 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.”
