Buy-to-let businesses have become the most prevalent type of company in the UK, surpassing all other sectors, including fast-food takeaways and hairdressing establishments, new data has revealed.
According to research by estate agent Hamptons, there are now more companies registered to hold buy-to-let properties than any other business type at Companies House, reflecting a significant shift in landlords’ strategies amid tax changes.
The number of registered buy-to-let companies surpassed 400,000 for the first time in February, reaching 401,744 by the end of the month. This marks a sharp rise from just 92,975 in February 2016, when the government began phasing out full mortgage interest tax relief for landlords filing as individuals. The trend highlights how investors are increasingly transferring property holdings from personal ownership to company structures to mitigate tax liabilities.
Hamptons noted that without these tax policy changes, most buy-to-let properties would likely have remained under personal ownership, where landlords declare rental income in annual self-assessments.
Growth Persists Despite Sector Challenges
The surge in buy-to-let company registrations comes even as rising mortgage costs have prompted many smaller landlords to exit the market. Last year, banking industry body UK Finance reported that the private rental sector had contracted for the first time in nearly 30 years.
Despite this, 2024 saw a record 61,517 new buy-to-let companies established—a 23% increase over 2023, which itself was a record year. There are now 680,000 rental properties in England and Wales held under limited company structures, with the number growing by 70,000 to 100,000 annually. While some of these are newly acquired properties, others are existing rentals transferred from personal ownership into corporate entities controlled by the same landlords.
However, future growth may moderate due to an increase in the stamp duty surcharge from 3% to 5%, as well as falling mortgage rates, which could encourage some investors to retain properties in their personal names. Nevertheless, Hamptons estimates that up to 75% of new buy-to-let purchases will still be made through company structures.
Rent Growth Slows, Offering Some Relief to Tenants
For tenants facing surging rental costs in recent years, there are signs of relief. Hamptons’ analysis shows that the average monthly rent for newly let properties rose by just 1% year-on-year in February to £1,355—the slowest increase since September 2020, when rents began recovering after the initial impact of the Covid-19 pandemic.
Rent renewals saw a more pronounced rise, with average monthly payments increasing by 5.6% to £1,262. In London, however, newly agreed rents fell by 2.8%, bringing rental prices back to May 2023 levels. Inner London saw an even steeper decline, with rents dropping 5.1% over the past year and now sitting 9.4% below their peak in 2023.
“Tenants moving into a new home have seen rental growth grind to a halt, with prices rising at the slowest rate since September 2020,” said Aneisha Beveridge, head of research at Hamptons. “In London, in particular, rents are declining, with inner London experiencing drops similar to those seen during the pandemic. This means some tenants who moved relatively recently may now find better deals by relocating again.”
While buy-to-let remains a dominant force in the UK property market, the sector is evolving under the weight of tax changes, shifting investment strategies, and fluctuating rental demand.
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