Index reveals rising rents and company incorporations

Rents are climbing and buy to let company formations are reaching unprecedented levels, one buy to let index reveals.

The platform GetGround has analysed its data to offer a snapshot that points to a thriving yet evolving market.

It says that in the 12 months to January 2025, rents grew by 8.7%, marking the sharpest rise in five years.

England led the charge with an 8.8% uptick, pushing average monthly rents to £1,375.

Wales followed at £780, while Scotland hit £995.

London saw the steepest regional climb in England at 11%, contrasting with Yorkshire and the Humber’s more modest 5.3% increase.

Rents continue to grow

GetGround says: “Across the UK, rent prices grew more this year than they have in the past five years.

“Wider external market factors, such as the inflation rate and the COVID-19 pandemic, caused rent prices to rise at a quicker pace from 2022.”

It adds: “Rent prices are at a peak across the UK.

“The greatest increase in rent prices has been seen in London with an 11% increase year-on-year to January 2025.”

BTL incorporations surge

The index also reveals that a record-breaking 61,436 buy to let companies launched in 2024, a 35% leap from 2023.

This spike, which is seven times higher than a decade ago, stems largely from Section 24.

GetGround says: “Since 2016, the number of buy to let companies incorporated has grown year-on-year.

“The introduction of Section 24, which restricted landlords from deducting their mortgage interest from their profit if they owned property in their personal name, was a primary reason for this growth.

“Between 2023 and 2024 the number of companies incorporated grew by 35%.”

Limited company landlords have grown in popularity in the North East, where their share rose from 4.1% to 8.9% over 10 years, while London’s share dipped from 20.8% to 14.7%.

House prices rose

The index also shows that house prices rose 4.6% in the year to November 2024, which is in stark recovery from the 1.4% drop between 2022 and 2023.

The North East topped England’s growth at 6.7%, while Northern Ireland also shone.

London’s £548,939 average house price is the UK’s priciest, against the North East’s £161,389 low.

Flats, meanwhile, remain the most affordable option, appealing to investors eyeing young professionals in urban hubs.

Residential sales drop

Despite a 12.5% drop in residential sales over the year to October 2024, property investment remains robust.

Sales fell 12.5% in the year up to October 2024, the Index reveals, with England bearing the brunt while Wales and Northern Ireland edged upwards.

Falling sales have fuelled rental demand, creating fertile ground for investors.

The firm says the UK’s buy to let sector is buzzing with opportunity as investors navigate a landscape shaped by economic shifts and strategic tax planning.