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Categories: limited company | buy to let mortgages
New industry data shows that limited company buy to let (BTL) properties are in extremely high demand, standing out as the most popular type of registered business.
Real estate firm Hamptons estimated that 70-75% of BTL purchases in 2024 went into a limited company structure.
For another relevant statistic, 30-40% of these purchases were held by companies formed less than 12 months earlier.
According to their data, a total of 390,000 BTL companies are operating in the UK. Across England and Wales, 680,000 properties are held in limited company structures.
This huge increase coincides with an overall rise in the number of new limited companies being registered. In 2024, over 60,000 new limited companies were established, 23% more than 2023’s total.
Possible causes for the rise in limited company purchases
Many landlords are opting to move their BTL properties out of their personal name and into limited company structures, or incorporate for future purchases. The tax benefits applicable to some investors that come with incorporating are a major contributing factor.
Over the tax years 2017-2018 through to 2020-2021, the slow withdrawing of mortgage interest tax relief took place. It was replaced by a flat 20% tax credit.
However, limited companies are still able to deduct the mortgage interest as a business expense. With reduced tax and higher potential profits from rent, this gives some landlords (and particularly those who are higher rate tax payers) a good incentive to incorporate.
What the future may hold
2023 was already a record-breaking year in terms of new limited companies being formed. 2024 managed to surpass it.
These latest figures indicate a promising trend for the future. On average, 70,000-100,000 new limited companies are being made each year.
That said, it is far too early to say if 2025 will be another record-breaking year. Another huge leap in limited company BTL properties is not guaranteed.
A number of big changes are on the near horizon for the private rented sector, including the likely passing of the Renters’ Rights Bill into law – and with it, a goodbye to Section 21 evictions.
In addition, Labour’s decision to raise stamp duty surcharge to five percent may deter some landlords from the limited company route.
Aneisha Beveridge, head of research at Hamptons, elaborated:
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.
We outline in our guide on the subject, the many advantages to investing in BTL via a limited company.
If you have a limited company BTL and are looking for a great mortgage deal, call our advisors today to explore the available options.
