A record number of buy-to-let companies were established in 2025, highlighting a major shift in how landlords across the UK are choosing to structure their property investments. New analysis from property firm Hamptons shows that more landlords than ever are moving away from owning property in their personal name and instead opting for limited company ownership.
Data from Companies House reveals that 66,587 new companies were formed last year specifically to hold buy-to-let properties. This represents an 8 per cent increase compared with 2024, when 61,517 similar companies were created. Over the past decade, the growth has been even more striking, with the number of buy-to-let companies rising by more than 360 per cent.
This surge has occurred despite property investors making up a smaller proportion of overall home buyers. Across the UK, landlords accounted for just 10.8 per cent of property purchases in 2025, down from 11.9 per cent in the previous year. Although fewer homes are being bought by investors, the way landlords are buying them has clearly changed.
Hamptons reports that more than three-quarters of all new buy-to-let purchases are now completed through limited companies rather than in individual names. This demonstrates a long-term structural change in the private rental market rather than a short-term trend.
Why landlords are turning to limited companies
Holding property within a limited company, often described as “incorporating”, has become an increasingly popular option for landlords looking to manage tax costs more efficiently. One of the key reasons for this shift is the difference between corporation tax and personal income tax.
Corporation tax is generally lower than the income tax rates paid by many private landlords. This allows investors who use company structures to retain a greater share of their rental income after tax.
Keeping profits inside a company also makes it easier for landlords to reinvest. Rather than losing a large portion of income to higher tax bills, investors can build up funds within the business and use them to purchase additional properties sooner.
Another major factor is the way mortgage interest is treated for tax purposes. Limited companies can deduct the full cost of mortgage interest from their rental income before calculating tax.
This is very different from the situation faced by landlords who own property in their personal name. They can now only claim tax relief on 20 per cent of their mortgage interest payments, following changes introduced in 2016.
For higher-rate taxpayers, this can significantly increase their tax bill. A landlord receiving £1,000 per month in rent while paying £500 in mortgage interest must pay tax on the full £1,000, with only limited relief applied afterwards.
In contrast, a landlord operating through a limited company would only be taxed on the remaining £500 once mortgage costs have been deducted. In simple terms, individual landlords are taxed on turnover, while company landlords are taxed on profit.
Rising pressures pushing landlords to incorporate
According to Aneisha Beveridge, the move towards limited company ownership continued throughout 2025 and shows no signs of slowing.
She explained that although the initial shift began after tax reforms in 2016, more recent pressures have accelerated the trend. These include frozen personal tax allowances and the impact of higher mortgage interest rates.
As borrowing costs have risen, the ability for company landlords to fully offset mortgage interest against their tax bill has become even more attractive.
At the same time, more landlords have found themselves pushed into the higher-rate income tax bracket. For these investors, paying corporation tax at between 19 and 25 per cent is often more appealing than facing personal tax rates of 40 per cent or more.
Growth continues into 2026
The momentum behind buy-to-let company formation has carried into 2026. In January alone, 5,922 new limited companies were created to hold rental property. This figure is 11 per cent higher than in the same month last year, suggesting the trend remains strong.
Limited companies are also increasingly being used to support joint investment. Of the 66,587 companies set up in 2025, ownership was shared between more than 103,000 shareholders.
Around 42 per cent of these companies had more than one shareholder, compared with just 34 per cent in 2016. This indicates that landlords are increasingly pooling resources with partners, family members or business associates.
By the end of 2025, there were 443,272 buy-to-let companies registered with Companies House, almost five times the number recorded in 2016.
Across England and Wales, more than 755,000 property titles are now held within company structures, compared with fewer than 273,000 a decade ago. Hamptons estimates that around 1.5 million buy-to-let properties are currently owned through limited companies.
London investors spreading across the UK
While around 31 per cent of buy-to-let companies are registered in London, their investments are far from limited to the capital.
Just over half of the properties purchased by London-based companies are now located outside London. This shows that capital-based investors are increasingly targeting regions where property prices are lower and rental yields can be stronger.
London companies now own more property titles in the East of England, South East, North West and North East than companies based locally in those regions.
This shift reflects changing investment strategies, with landlords seeking better value and long-term growth opportunities outside the capital.
In fact, buy-to-let firms were the second most common type of new business formed in the UK in 2025, surpassed only by mail order companies.
Is a limited company right for every landlord?
Despite the strong growth in company ownership, it is not always the best option for every investor. The financial benefits depend heavily on personal circumstances, including income level, mortgage size and long-term plans.
Lower-rate taxpayers, particularly those with smaller mortgages, may still be better off holding property in their own name.
There are also higher borrowing costs to consider. Mortgages for limited companies usually come with higher interest rates and larger arrangement fees than standard buy-to-let mortgages for individuals.
This means that while a landlord may save money on tax, they could end up paying more to their mortgage lender.
In addition, owning property through a company brings extra administration. Company accounts must be prepared and filed, records maintained and directors formally appointed.
Many landlords also need to hire an accountant, which adds another ongoing expense.
Aneisha Beveridge has noted that although limited company ownership now makes financial sense for the majority of landlords, it is not a one-size-fits-all solution.
Between 75 and 80 per cent of new buy-to-let purchases are now made through companies. However, for landlords who rely solely on rental income and remain basic-rate taxpayers, owning property personally can still be the better option.
This is particularly true as Companies House filing fees and administrative costs have risen above inflation in recent years.
A changing rental market
The rapid rise in buy-to-let companies highlights how the UK rental market continues to evolve in response to tax policy and economic pressures.
While fewer investors are buying homes overall, those who remain active are becoming more strategic in how they structure their portfolios.
Limited companies are now central to many landlords’ long-term plans, allowing them to manage tax more efficiently and grow their property businesses in a challenging environment.
As mortgage rates, tax rules and house prices continue to shift, the number of buy-to-let companies is likely to keep rising, reshaping the private rental sector for years to come.
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