According to an analysis of Companies House data conducted by Hamptons, the total count of companies owning buy-to-let properties in the UK has exceeded 400,000.
This follows an unprecedented incorporation of 61,517 new buy-to-let limited companies in 2024, marking a 23 per cent rise from the previous record established in 2023.
Purchasing buy to let property through a limited company, referred to as ‘incorporating’, serves as an alternative to owning property in an individual’s (or jointly) name, and is usually done to reduce tax.
The report by Hamptons discovered that there has been a 332 per cent increase in the number of buy-to-let firms since February 2016, escalating from 92,975 to 401,744 in February 2025.
Not all of these rental properties are new to the market; in fact, with some landlords transitioning from individual property ownership to a limited company that is still under their control.
It does appear that the limited company structure is currently preferred by new property investors entering the market with Hamptons estimating that between 70% and 75% of new buy-to-let investments are being made through a corporate framework.
Currently, approximately 680,000 rental properties in England and Wales are owned through limited company structures, with the report confirming that this figure is rising by 70,000 to 100,000 each year, which is a significant shift.
The increase in limited company buy-to-let properties has been heavily influenced by the varying tax treatments of buy-to-let investments held in companies compared to those owned in personal names.
Having ownership of rental property in a limited company can provide tax benefits most notably corporation tax which is set at a lower rate than income tax.
For higher rate taxpayers capital gains tax (CGT) can also be reduced if a property is sold and a qualifying capital gain has been made.
Why are so many landlords choosing a limited company?
Making the choice to run a property business through a limited company is typically made for tax purposes.
With making tax digital for landlords being introduced from April 2026 now could be a good time to consider incorporating your property business.
For landlords that operate using finance (usually a buy to let mortgage) holding property within a limited company enables them to completely deduct their mortgage interest from their rental income.
This is in contrast to landlords who possess property under their own name, as they are only eligible for tax relief amounting to 20 per cent of their mortgage interest expenses.
According to the Hamptons report, if the changes to mortgage interest relief tax had not been implemented in 2016 it’s estimated that approximately 223,000 fewer companies would have been established in the past nine years.
It states that, in the absence of alterations to the tax regulations, the many buy-to-let properties would likely have stayed under individual ownership, with investors reporting and paying income tax through their yearly self-assessment.
Aneisha Beveridge, head of research at Hamptons, said: “The limited company is now the structure of choice for the next generation of investors too. We estimate that 70-75% of new buy-to-let purchases now go into a company structure, a figure that has been steadily growing.
‘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.”
All of this indicates that the count of buy to let limited companies is generally expected to maintain its increasing trend for the foreseeable future.
Other potential tax advantages for buy to let limited company landlords include:
- Efficient Tax Strategies for Profit Withdrawal: You have the flexibility to decide how to take profits from your business, whether through salary, dividends, or other means, which can help you optimise your tax liabilities.
- Limited company Liability: A limited company stands as an independent legal entity, usually safeguarding your personal possessions from being liable for business debts.
- Opportunity for Reinvestment: Profits kept within the company can be reinvested into purchasing additional properties, often benefiting from a lower tax rate compared to withdrawing them and incurring personal income tax.
- Capital gains tax: A limited company can lower capital gains tax if you sell an investment property, with profits taxed at corporation tax rates instead of CGT rates.
- Streamlined Inheritance Planning:
The process of transferring ownership through shares in a company can be more straightforward than transferring property, which may aid in simplifying inheritance tax (IHT)
Disadvantages of limited companies for property owners
In the end, the potential benefit or lack thereof hinges on your own circumstances as a buy to let landlord.
Establishing a limited company is generally more advantageous for individuals paying higher rates of tax or those who own several rental properties.
For taxpayers in the lower rate tax brackets, outright property owners, and individuals planning to sell in the near future, transitioning to a limited company structure may not be financially sensible.
In such cases, the expenses associated with transferring the property may surpass any financial gains so you have to do you sums to make sure it’s financially worth it.
Landlords also have to be aware an additional layer of bureaucracy is introduced through a corporate structure. It is necessary to formally prepare and submit company accounts, keep records, and designate directors.
This can result in an increased workload for landlords opting for the limited company option, along with additional expenses if they decide to hire an accountant.
Additionally, individuals purchasing with a mortgage may face increased expenses. This is primarily due to the fact that mortgages offered by companies generally have higher rates and fees on average.
The future for the limited company buy-to-let sector
Establishing a limited company for buy-to-let purposes can be an effective strategy but landlords must fully understand all of the implications.
Several factors can affect the attractiveness of choosing a limited company structure for a rental property business including the stamp duty surcharge increasing from 3 per cent to 5 per cent take effect and a reduction in buy to let mortgage rates.
Aneisha Beveridge states: “The recent increase in the stamp duty surcharge from 3% to 5% may deter some landlords from transferring existing properties into company structures. Additionally, falling mortgage rates could mean the benefit of incorporation for some investors is weakened.”
The message is if you are a seasoned buy-to-let investor or contemplating your first property investment via a limited company, it’s crucial to obtain advice on tax, legal matters, and mortgages right from the beginning.
