Professional landlords are increasingly switching to a limited company structure to avoid tax charges stemming from new buy-to-let rules.
Research from specialist lender Precise Mortgages showed landlords with bigger portfolios in particular had swung to using limited company status for new purchases.
It found almost two out of three (64 per cent) landlords with more than four properties and who planned to buy this year will use limited company status compared with just 21 per cent who intend to buy as individuals.
A series of tax and regulatory changes have sparked an increasing move towards limited company structures in the buy-to-let market as landlords seek to reshuffle their portfolios for maximum profitability.
The introduction of an additional 3 per cent stamp duty surcharge in April 2016 was closely followed by the abolition of mortgage interest tax relief for landlords, to be phased down to a 20 per cent flat rate in 2020, further pushing the limits of landlord profitability
The phased reduction in mortgage interest tax relief does not affect limited company landlords who can continue to offset mortgage interest against profits, which are subject to a corporation tax of 19 per cent instead of income tax rates.
Across the buy-to-let market as a whole 44 per cent of landlords planning to purchase another property will use limited company status, but that falls with the size of landlord's portfolio with 17 per cent of landlords with one to three properties favouring the structure.
The research found two out of five (37 per cent) of smaller portfolio landlords will buy as individuals.
Alan Cleary, managing director of Precise Mortgages, said: "The buy-to-let market is changing and the switch to greater use of limited company status is one aspect of the development underlining the increasing maturity of the sector.
"There are good reasons why limited company buy-to-let is dominating the purchase market and we expect that will continue to be the case this year and next.
"Brokers and customers however need expert specialist support when buying as a limited company or considering switching to limited company status as there are considerable costs involved."
In November last year Shawbrook Bank reported its buy-to-let borrowers were increasingly transferring properties to limited companies to navigate tax changes in the market.
Figures from the lender showed the proportion of buy-to-let mortgages completed by individual landlords had fallen from 68 per cent in the first half of 2015, to 34 per cent in the same period of 2018.
Meanwhile the proportion being completed by limited companies had doubled from 32 per cent to 64 per cent in the same period.