The Hamptons Monthly Lettings Index reported a significant rise in the number of buy-to-let (BTL) companies in the UK, reaching over 400,000 by February 2025.
The figures showed an increase from 92,975 to 401,744 companies since February 2016, representing a 332% rise.
This growth coincided with the phased withdrawal of mortgage interest tax relief for higher-rate taxpayers.
As of 2024, a record 61,517 new companies were set up, marking a 23% increase from 2023.
The report stated that the number of BTL properties held in limited companies across England and Wales stands at around 680,000.
The report also noted a slowdown in rental growth, with the average rent on a new let in Great Britain increasing by just 1.0%, the slowest rate since September 2020.
In London, newly agreed rents dropped by 2.8%, with Inner London rents down by 5.1% over the past year.
Aneisha Beveridge, head of research at Hamptons, said: “The limited company is now the structure of choice for the next generation of investors.
“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.”
Beveridge added: “But 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.
“It will also weigh down on the number of new buy-to-let purchases overall, likely suppressing the number of companies being set up.”
She said: “Tenants moving into a new home have seen rental growth grind to a halt, with prices rising at the slowest rate since September 2020.
“Londoners, in particular, have seen rents go backwards, with Inner London rents now falling at about half the pace they did during the pandemic.
“This means some tenants who moved relatively recently may be able to find themselves a better deal by moving again.”
