It's now the most common type of business registered at Companies House
The number of companies set up to hold buy-to-let properties in the UK has exceeded 400,000 for the first time, making it the most common type of business registered at Companies House.
According to data from Hamptons and Companies House, the total number of buy-to-let companies increased from 92,975 in February 2016 to 401,744 in February 2025, marking a 332% rise. This surge coincides with the gradual withdrawal of full mortgage interest tax relief, which began in 2016.
In 2024 alone, a record-breaking 61,517 new limited companies were established, surpassing the previous high of 50,004 in 2023. The steady rise in incorporations over the last decade has been attributed to landlords moving properties into company structures to mitigate tax liabilities.
London leads buy-to-let incorporations
London remains the dominant region for buy-to-let companies, accounting for 30% of the total. Other significant concentrations are found in the South East (13%) and the North West (10%). The ability to offset mortgage interest costs is particularly crucial in the capital, where rental yields tend to be lower.
Across England and Wales, approximately 680,000 buy-to-let properties are now held under a limited company structure. This number has been increasing by 70,000 to 100,000 annually, as more landlords transfer their holdings from personal ownership.
Impact of tax changes
The dramatic increase in incorporations is attributed to tax reforms introduced by former Chancellor George Osborne. Prior to these changes, landlords could deduct mortgage interest as an expense, but the phased removal of this relief has led many higher-rate taxpayers to incorporate their portfolios. Without these tax changes, experts estimate that around 223,000 fewer buy-to-let companies would have been set up.
However, further policy changes could slow this trend. The recent increase in the stamp duty surcharge for property purchases from 3% to 5% is expected to discourage some investors from transferring existing properties into a company structure. Nonetheless, an estimated 70% to 75% of new buy-to-let purchases now go into company ownership.
Slowing rental growth
Despite the boom in company formations, rental growth has slowed considerably. Over the past year, the average rent on a newly agreed tenancy in Great Britain rose by just 1.0%, the slowest rate since September 2020. In London, rents have declined, bringing the cost of moving home back to May 2023 levels. Inner London rents have fallen by 5.1% year-on-year, standing 9.4% below their peak in 2024.
“The limited company is now the structure of choice for the next generation of investors. But 2024 may prove to be a high watermark for the number of new companies set up to hold buy-to-let property. Higher stamp duty rates will be a big barrier for investors looking to move an existing rental home from a personal name into a company structure,” said Aneisha Beveridge, head of research at Hamptons.
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