Applications for limited company buy-to-let mortgages have soared since December and now make up to one in three new cases.

Growth has been driven by Chancellor George Osborne’s plans to phase out higher rate tax relief on mortgage interest repayments from April next year.

The change will not affect landlords who invest through a limited company, driving up demand from this source.

New figures from Kent Reliance show that limited company mortgages made up just 18% of all applications by value in July, rising to 32% in December.

The lender has commissioned a new report to educate landlords on the tax implications of incorporating, with accountancy firm EY.

It warned that many landlords could enter a limited company holding without fully understanding the implications of doing so.

The report suggests that landlords could make big savings by setting up a limited company, in one example cutting the tax on rental profits from £4,480 to just £1,101 a year.

John Eastgate, sales & marketing director for OneSavings Bank, said: “For many, incorporation will bring down tax bills, but it is not a one-size-fits-all approach.

“For instance, landlords will need to factor in additional transactional and administrative costs if they do make the move.

“We’d urge any property investor to seek professional advice from a suitably qualified professional before any decision.”

Kent Reliance for Intermediaries recently announced a new policy allowing landlords who wish to transfer their existing buy-to-let property from their individual name into a company or limited liability partnership structure.