Buy to let company boom hits record high

A record number of buy to let companies were established last year, underlining how landlords are continuing to restructure their portfolios.

The analysis from Hamptons shows 66,587 new limited firms were set up to hold rental property in 2025, an 8% rise on 2024 and 363% higher than a decade ago.

By the end of the year, 443,272 BT businesses were active across the UK, almost five times the 91,278 recorded in 2016.

Incorporations in January are also 11% ahead of the same month in 2025 as the trend towards landlord incorporation.

Landlords continue to incorporate

Hamptons’ head of research, Aneisha Beveridge, said: “Landlord’s shift towards limited company ownership continued through 2025 and shows little sign of slowing this year.

“While the tougher tax treatment introduced in 2016 sparked the initial move into corporate structures, five years of frozen personal allowances, combined with the impact of higher mortgage rates, which company landlords can fully offset against their tax bill, have fuelled the more recent surge.

“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 added: “Today, limited company ownership makes financial sense for the majority of landlords, with around 75%-80% of all new buy to let purchases now made via a company.

“For landlords who earn no income beyond their rents and remain lower-rate taxpayers, owning property in personal names can still be the better option, particularly as above-inflation increases have pushed up Companies House filing fees.”

Landlords buy fewer homes

The growth of BTL companies comes as landlords are buying fewer properties – Hamptons says they purchased 10.8% across Great Britain last year, down from 11.9% previously.

The firm says the rise in company formations reflects both new acquisitions and existing owners transferring personally held assets into corporate structures.

Today, more than three-quarters of newly purchased buy to lets are bought via companies.

A peak of 6,493 incorporations was recorded in September, the highest on record, while more than 5,000 were formed in 10 separate months.

Geographically, London dominates with 31% of registered firms, though more than half of purchases by London-based companies sit outside the capital.

Rent growth is cooling

Meanwhile, Hamptons also reveals that rent growth is cooling and in Scotland, newly agreed rents dipped 0.2%, the first annual fall since mid-2020.

Yorkshire and the Humber has seen six months of reductions, with prices down 1.4% to £915.

Tenants signing fresh tenancies paid 2.8% more on average, reaching £1,305.

London was the sole region where renewal rents dropped, falling 1.5% to £2,222.

Ms Beveridge said: “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.

“With rent increases due to be open to tribunal challenge from May, many landlords are using the months ahead to ensure their rents are aligned as closely as possible to market levels.”

Important context: Property118 is not currently recommending Section 162 incorporation for landlords with mortgages while legal uncertainty remains over the treatment of mortgage liabilities. Read our current position here: Why Property118 is not currently recommending s162 incorporation to landlords with mortgages

A conversation worth having?

If you are weighing up your own strategy, whether that’s to sell, expand, or restructure to improve profitibility, it is worth having a discussion with a Property118 consultant to take a closer look at how your portfolio is structured as a whole now, and to forecast the outcomes based on multiple scenario’s.

These conversations are typically most useful for landlords with established portfolios and relatively modest borrowing who are beginning to reflect on how their assets could work more effectively in the years ahead.