How Partnerships are Changing Buy-to-Let

Investing in buy-to-let property has always been attractive in the UK, but the model has shifted. Higher borrowing costs, stricter mortgage rules and less generous tax treatment have forced landlords to rethink how they approach the sector. Increasingly, partnerships, whether between friends, family members or business colleagues, are becoming a way to share the risks while multiplying the opportunities.

The logic is clear. Pooling capital allows access to better located or higher yielding properties than many could afford alone. Mortgage applications can be strengthened by combining incomes. Just as importantly, partners often bring different skills. One may excel at sourcing deals or managing renovations, the other at handling finance or long-term planning. Together, they can create a more resilient and scalable investment model.

There are several ways to structure such arrangements, each with distinct advantages. The simplest is joint ownership, where partners hold the property either as joint tenants or, more flexibly, as tenants in common. The latter allows ownership to be divided in percentages, for example 60:40, and rental income to be split accordingly. A little known tool, “Form 17”, even allows the income to be apportioned differently from ownership, which can be helpful where one partner sits in a lower tax bracket.

A more modern approach is to buy through a limited company, often referred to as a special purpose vehicle, or SPV. This has become increasingly popular since tax changes reduced the ability of individual landlords to offset mortgage interest. In a company structure, mortgage interest remains deductible and profits are taxed at corporation tax rates, which may be lower than personal income tax. Ownership can also be structured more flexibly, with partners holding shares that can be transferred without forcing a sale of the property.

Some partnerships go further and operate as joint ventures, where one party contributes the deposit and refurbishment costs and the other supplies expertise and management. Profits are shared according to a negotiated formula. These models are especially common among younger investors who may lack capital but are willing to provide the time and effort needed to add value. Others take the idea further by forming small syndicates or investment clubs, pooling funds from several people to buy larger assets such as HMOs or student blocks. What was once confined to institutional players is now more accessible thanks to online platforms and clearer legal frameworks.

Alongside these structures, a number of modern practices are shaping how BTL partnerships operate. Some investors establish one SPV per property, ring fencing risks and keeping accounts cleaner. Others design their agreements to allow partners to exit by selling their shares, avoiding the need to liquidate the underlying property. Increasingly, partnerships also rely on PropTech platforms to handle lettings, rent collection and compliance, which reduces friction over who manages day to day tasks. A popular strategy, particularly when two or more investors combine funds, is the buy, refurbish, rent, refinance model, where value is created through refurbishment and released via refinancing, with the capital then recycled into the next project.

A simple example illustrates how this works in practice. Suppose Alice has £60,000 in savings but little time to manage property, while Ben has £40,000 and strong project management skills. Together, they buy a flat in Manchester for £250,000, investing £20,000 into refurbishment. The property rents for £1,800 a month. In a joint ownership model, Alice and Ben might hold the property as tenants in common with a 60:40 split. In a company structure, they could both hold shares and agree a profit split that reflects not just their capital contributions but Ben’s ongoing role. In either case, the partnership allows them to take on a property that neither could manage alone.

None of these approaches eliminate risk, and the importance of a properly drafted partnership or shareholder agreement cannot be overstated. Differences in risk appetite, uneven effort, or diverging time horizons can easily sour informal arrangements. Yet, when managed carefully, partnerships in buy-to-let are not just a way of sharing costs. They can provide the structure and scale to thrive in a market that increasingly demands professionalism.

‍