Landlord ‘companies’ now most common type of firm in UK
Latest data from Hamptons shows the extraordinary rise in the use of limited companies mainly by high-tax-rate paying landlords seeking to reduce their liability.
A more than threefold increase in landlords moving to limited company operation has been reported as many seek to reduce their tax bills.
Hamptons, which has published the data, says that the number of companies holding buy-to-let property in the UK rose from 92,975 in 2016 – when tax reliefs began to be withdrawn – to 401,744 February 2025.
Also, the number of companies set up to hold buy-to-let property across the UK passed the 400,000 mark in February 2025 for the first time, making it the most common type of firm registered at Companies House.
The pace of growth of buy-to-let incorporations has remained high since 2016, when full mortgage interest tax relief began to be withdrawn from homes owned by higher-rate taxpayers.
But Hamptons is at pains to point out that although landlords lost the right to claim mortgage interest as a tax-deductible expense from 2020 onwards, they were instead given a 20% tax credit.
This largely gave landlords who are lower-rate tax payers the same tax reduction as if they had claimed mortgage interest rate, but severely impacted high-rate tax bracket landlords and it is these who are moving over the ‘limited company’ operations.
“The limited company is now the structure of choice for the next generation of investors,” says Aneisha Beveridge, Head of Research at Hamptons.
“Current tax rules mean that most, although not all, new investors find themselves better off in a company structure than owning an investment property in their own name.
“This means the number of limited companies is likely to continue its upward trajectory for the foreseeable future.”
High water mark
She says 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,” adds Beveridge.
“It will also weigh down on the number of new buy-to-let purchases overall, likely suppressing the number of companies being set up.”
