## Record Growth in Buy-to-Let Limited Company Formations

According to research from Hamptons, 66,587 new limited companies were set up to hold rental properties in 2025. This represents an 8% increase on 2024 figures and a remarkable 363% rise compared to ten years ago. By the end of 2025, there were 443,272 active buy-to-let (BTL) companies across the UK, nearly five times the 91,278 recorded in 2016. The trend shows no sign of slowing, with January 2026 incorporations already 11% higher than the same month last year.

This growth highlights a significant restructuring within the private rented sector, as landlords increasingly choose to hold properties through limited companies rather than personal ownership.

## Why Landlords Are Choosing Limited Companies

Aneisha Beveridge, Head of Research at Hamptons, explains that the move towards limited company ownership has been ongoing since the introduction of tougher tax rules in 2016. However, more recent factors have accelerated this trend. These include five years of frozen personal tax allowances and rising mortgage interest rates, which landlords can fully offset against their tax bills when operating through a company.

Ms Beveridge notes, “As more landlords find themselves pulled into the 40% income tax bracket, paying corporation tax at 19% or even 25% has become increasingly attractive.” She adds that currently around 75% to 80% of all new buy-to-let purchases are made via limited companies.

However, she also points out that for landlords who earn no income beyond their rental income and remain lower-rate taxpayers, owning property in their personal names can still be more beneficial. This is especially relevant given recent above-inflation increases in Companies House filing fees.

## Fewer Properties Bought but More Transfers to Companies

Despite the surge in company formations, landlords are purchasing fewer properties overall. Hamptons reports that landlords accounted for 10.8% of property purchases across Great Britain in 2025, down from 11.9% the previous year. The rise in limited company incorporations reflects not only new acquisitions but also existing landlords transferring personally held properties into corporate structures.

More than three-quarters of newly purchased buy-to-let properties are now bought via companies. September 2025 saw a record peak of 6,493 incorporations, with over 5,000 companies formed in ten separate months throughout the year.

Geographically, London leads with 31% of registered buy-to-let companies, though more than half of purchases by London-based companies are outside the capital.

## Rent Growth Shows Signs of Cooling

Hamptons’ data also reveals a cooling in rent growth. In Scotland, newly agreed rents fell by 0.2% in 2025, marking the first annual decline since mid-2020. Yorkshire and the Humber experienced six consecutive months of rent reductions, with prices dropping 1.4% to an average of £915. Meanwhile, tenants signing new tenancies across the UK paid 2.8% more on average, reaching £1,305.

London was the only region where renewal rents declined, falling 1.5% to £2,222. Ms Beveridge comments, “While newly agreed rents continue to record small annual falls, the pace of decline has stabilised. And as has been the case for the last two years, tenants renewing their contracts are seeing the larger rises.”

She also highlights that with rent increases becoming subject to tribunal challenge from May 2026, many landlords are using the coming months to align rents closely with market levels.

## What This Means for Landlords

The continuing rise in buy-to-let limited company formations suggests that corporate ownership remains financially advantageous for many landlords, particularly those affected by higher income tax rates and mortgage interest restrictions. However, landlords should carefully consider their individual tax circumstances, as personal ownership may still be preferable for some.

The cooling rent growth and the upcoming tribunal challenges on rent increases mean landlords need to be vigilant in setting rents appropriately to avoid disputes. The trend towards incorporation also implies increased administrative responsibilities and costs, including Companies House fees, which landlords should factor into their portfolio management.

Suggested internal link anchors

– buy to let limited companies
– landlord incorporation
– corporation tax rates
– mortgage interest tax relief
– property portfolio restructuring
– rent growth trends
– tribunal challenge on rent increases
– Companies House filing fees
– buy to let property purchases
– landlord tax planning
– private rented sector trends
– rental income tax implications

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/