Government intervention in the private rented sector (PRS) has generated record demand for mortgages via companies in 2016, and will push up rents further, according to the fourth edition of Kent Reliance’s Buy To Let Britain report.

Landlords have flocked to incorporate in order to mitigate the impact of the tax changes announced in the Summer Budget, which lowers the tax relief for mortgage interest payments for landlords from April 2017. Borrowing through a company structure means investors are taxed on profits at lower corporation tax rates, and can offset all finance costs against rental income.

Kent Reliance’s data shows mortgage applications via limited companies increased by over 80% in 2015 compared to 2014. In total, limited company loans accounted for more than one in five buy to let mortgages last year, nearly 55,000 across the buy to let whole market.

This demand has intensified in 2016. In the first three months of the year, just under 38,000 loans were issued to limited companies, nearly four times the number issued in the same period in 2015. Alongside landlords’ increasing demand for this type of finance, the overall numbers were supported by increased buy to let transactions in March as landlords hurried to complete purchases ahead of the introduction of a 3% stamp duty surcharge in April.