In recent years, there has been a significant increase in the number of landlords forming limited companies to manage their buy-to-let business. This trend is primarily driven by the impact of the introduction of the Section 24 tax changes, which limits the extent to which landlords can offset mortgage interest against their tax liability, particularly for higher-rate taxpayers. For landlords who are considering transferring existing portfolios into a corporate structure, it is vital that they seek advice from experienced tax professionals.
Impact on mortgage funding
Transferring legal ownership of property portfolios from personal/partnership into corporate ownership will require all existing mortgages to be refinanced. Novation or ‘transfer’ of existing mortgages into the corporate is not possible. Consequently, the mortgage terms and lender may be different. The following needs to be taken into consideration:
- The cost of ERCs (Early Repayment Charges) on existing mortgages;
- Impact of associated costs (lender, legal, valuation fees etc) on cash flow;
- Ensure mortgage lender(s) and conveyancing lawyers are prepared for the transfer of the entire property portfolio;
- Lenders will view the transaction as a sale by the landlord and a purchase by the corporate at current market value and hence will need evidence of ‘equity injection’;
- Stamp Duty Land Tax – change of legal ownership from personal/partnership to corporate may trigger SDLT charges.
Corporate buy to let mortgage market
Over the past few years, the number of lenders offering BTL mortgages to corporates has increased rapidly, leading to greater competition and improved mortgage pricing , terms and flexibility. Some of the issues to take into consideration are:
- Lender’s arrangement fees can vary from typically 1% to 10%. The arrangement fee will affect the interest rate charged during the mortgage term;
- Rental stress testing is done at 125% rather than 145% (for higher rate tax payers) thereby permitting higher loan to values (normally capped at 75%);
- Some lenders offer mortgages with higher arrangement fees combined with a lower rate of interest thereby reducing the monthly payments;
- Not all lenders are comfortable with HMOs/Student accommodation/Holiday lets. Where a landlord’s portfolio includes a mixture of property and tenant types then different lenders may need to be approached.
Shareholding structure and succession planning
Increasingly landlords are combining the incorporation of an existing property portfolio with long term succession and inheritance tax planning. Quite often this planning will take into consideration various shareholding structures across family members (typically children) e.g. growth shares, alphabet shares, preference shares etc
Before finalising and executing an incorporation plan it is imperative that landlords undertake detailed research of the mortgage market to ensure lenders will accept the proposed structure and the impact it will have on mortgage finance.
Portfolio landlord
If you are considering a corporate structure for your existing property portfolio it is highly likely that lenders will regard you as a ‘portfolio landlord’.
A portfolio landlord is a borrower with four or more distinct mortgaged buy to let rental properties. This includes:
- properties owned through a limited company/partnership
- and all BTL mortgaged properties owned solely or jointly by the applicant(s).
Additional mortgage criteria for portfolio landlords
When considering a mortgage application for a portfolio landlord, lenders are required to carry out additional affordability checks. During the underwriting process the borrower will be required to provide the following:
- full details of all existing properties owned (fully or partly) including rental income, current loan to value, mortgage term, monthly payments;
- cash flow forecasts and business plan;
- submitted tax returns (personal or corporate)
The lender will use the information to assess the landlord’s ability to afford the mortgage applied for by stress testing the existing portfolio alongside the new purchase and new mortgage.
Kinnison Guide for Portfolio Landlords
If you would like to learn more about growing your buy to let portfolio, please download the free Kinnison guide:
ICAEW Property Investing Conference
If you would like to hear more from the Kinnison team and industry experts please join us at the ICAEW property investing conference on 28th November 2025. During the conference you’ll learn about:
- mortgage finance challenges facing portfolio landlords and how to overcome them;
- key considerations to take into account with corporate structures
- lender innovation designed to assist landlords.
Tax advice
It is absolutely vital that a Landlord seeks the right tax advice from an experienced tax adviser before embarking on the journey of incorporation. If the landlord is relying on tax reliefs to mitigate potential CGT and SDLT liabilities, then thorough tax advice is required to ensure all the relevant ‘statutory relief’ criteria are met.
How the Kinnison team can assist
The Kinnison team have significant experience working with landlords looking to refinance and restructure their property portfolio.
We recommend that you/your clients review current residential BTL mortgage arrangements. If you wish to discuss your/your clients personal circumstances with a member of our team, please contact the Kinnison team:
Email: [email protected]
Call: 0203 871 2824