75% of landlords operating in the UK have now used a limited company to invest in at least one of their investment properties, according to poll from GetGround.
49% of these landlords first invested via a limited company within the last 12 months, while 42% of them invested via a limited company for the first time in the last one to three years.
While use of limited companies is high among landlords, they have yet to be fully adopted by most investors: the poll shows that 93% of landlords that have used limited companies manage less than half of their total property investment portfolios through companies.
External market events are driving adoption of limited companies by landlords according to the data:
- 93% of landlords surveyed who incorporate their property investments said that if it wasn’t for the limited company structure, their investments would be less profitable while mortgage rates remain high
- 57% of landlords say the limited personal liability is a key benefit of incorporation, thus protecting themselves against the higher risk of missed rental payments in the current cost of living crisis
- 57% of landlords believe using limited companies to enable co-investment among multiple people is a second key advantage, creating a path around the not insignificant cost of entering the investment market
Moubin Faizullah Khan, CEO of GetGround, said: “Industry data is creating an exciting picture of limited company adoption across the landlord community, but until now it’s not been entirely clear how many individual landlords are using limited companies and how extensively used they are among landlords’ portfolios.
“Our final poll for 2022 shows that awareness and adoption of incorporations is fast growing, and importantly, for the right reasons. Whether it’s affordability, protection against risk, financial viability or acting responsibly and transparently, incorporating your investments pays off. It is reasonable to expect that limited company adoption will continue to accelerate as we move into 2023.”
A GetGround separate survey conducted in May 2022 that found that 78% of landlords believe investing through limited companies helps them better mitigate the impact of inflation than investing in their personal name.
The snap poll also found that 78% of landlords have moved an investment property from personal ownership into a company structure after completion. 80% of these landlords say that between a quarter and half of the limited companies they own were created post completion.
