The surge in landlords moving properties into limited companies may be starting to lose momentum, potentially putting a £1.2 billion annual source of Stamp Duty Land Tax (SDLT) revenue under pressure.
Hamptons recorded 41,483 new buy-to-let companies across Great Britain between January and August 2026. This was 8% lower than the 44,802 formations recorded during the same period last year.
The slowdown was even more pronounced in August, when 4,198 new companies were created. That represents a 22% decline from the 5,363 registered in August 2025.
Company formations have become an important indicator of landlords restructuring their portfolios for tax and financing reasons. Hamptons now believes 2026 could be the first year since 2008 when the number of new buy-to-let companies falls.
Landlord Incorporations Begin to Slow
The growth in company ownership accelerated after changes to mortgage interest tax relief made personally owned rental properties less attractive to many higher-rate taxpayers.
A significant proportion of these incorporations have involved landlords transferring properties they already owned rather than purchasing new homes.
According to Hamptons, 53% of properties moved into company structures during 2025 were existing properties transferred from personal ownership.
These transactions can generate considerable tax revenue for the Treasury. Hamptons estimates that the average SDLT bill on such a transfer is around £28,000, based on an average property value of £380,000.
Capital Gains Tax can also apply when properties are transferred, potentially adding to the overall cost of restructuring a portfolio.
Hamptons estimates that property transfers into companies have been generating around £1.2 billion in SDLT revenue each year.
New Purchases Now Make Up the Majority
There has been a notable change in the type of properties entering company structures during 2026.
For the first time, Hamptons says newly purchased properties accounted for more than half of the properties being acquired through limited companies, at 51%.
This suggests the incorporation market may be moving away from the earlier wave of landlords transferring existing portfolios.
However, the decline in company formations does not necessarily mean landlords are leaving the private rented sector.
A fall could instead reflect fewer landlords restructuring existing properties, slower investor activity or potential buyers delaying decisions. Company registration figures alone cannot distinguish between these different factors.
Fewer Properties Left to Transfer
The pool of landlords who could benefit from incorporating may also be becoming smaller.
Many landlords have already transferred their properties into companies following changes to the tax treatment of rental income and mortgage costs. Those who have yet to restructure may face significant upfront costs from SDLT and potentially Capital Gains Tax.
Despite the slowdown in new formations, the number of active buy-to-let companies continues to grow.
Hamptons recorded 469,165 active buy-to-let companies by the end of August 2026. That is around eight times the number recorded a decade ago.
The figures therefore show that company ownership remains a significant part of the professional buy-to-let market, even though the pace of new incorporations appears to be weakening.
Incorporation Does Not Always Mean Landlord Exit
The changing company formation figures should also be viewed alongside the increasingly varied profile of buy-to-let investors.
Earlier data has shown that a proportion of newly established buy-to-let companies have overseas directors, highlighting that company formations cannot be used as a straightforward measure of domestic landlord activity.
Likewise, a reduction in registrations does not automatically mean landlords are selling properties or withdrawing from the rental market.
It may simply indicate that the large-scale restructuring that followed changes to mortgage interest tax relief is beginning to run its course.
What Should Landlords Consider?
For landlords considering moving a personally owned property into a limited company, the latest figures underline the importance of looking at the individual numbers rather than assuming incorporation will automatically reduce tax.
Mortgage availability and interest rates, SDLT, Capital Gains Tax, financing costs and future plans for the property can all influence whether incorporation makes financial sense.
The intended investment period is also important. The upfront costs associated with transferring a property can be substantial, meaning the potential long-term benefits need to outweigh those initial expenses.
Professional tax and financial advice may therefore be appropriate before restructuring an existing portfolio.
What Does This Mean for the Property Market?
The slowdown in buy-to-let incorporations could mark a shift in landlord behaviour after several years of strong growth in company ownership.
For the Treasury, fewer property transfers could eventually reduce the SDLT revenue generated by incorporations.
For the rental market, however, the figures are less straightforward. A fall in company formations does not necessarily indicate that landlords are selling up or that investment in the sector has stopped.
Instead, the data may suggest that much of the post-tax-reform restructuring has already happened.
The key question now is whether the decline in incorporations remains limited to portfolio restructuring or develops into a broader slowdown in new buy-to-let investment.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property