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Number of Buy-to-Let Companies Passes 300,000

The latest Hamptons Monthly Lettings Index (September 2022) has revealed that September saw the total number of companies set up to hold buy-to-let property pass 300,000 for the first time. This means that the total number of buy-to-let companies has doubled over the last five years since 2017.  The increase has been driven by new buy-to-let purchases being made in a company structure as well as landlords moving properties from personal to company names.

Hamptons says that it is likely that more buy-to-let companies will be set up in 2022 than in any previous year, despite there being fewer buy-to-let homes bought this year in comparison to last year.  This rise has been exacerbated by rising rates as existing landlords move properties that they already own from personal to company names, in a bid to offset rising mortgage interest against their tax bill and increase their profits.

‘Our estimates suggest that around 40% of all new buy-to-let purchases are now made via a company structure, a record figure and one which is up from around 10% in 2016 before the Section 24 tax changes were tapered in. This means that although the share of homes bought by an investor has remained broadly stable over the last couple of years, an increasing proportion of these purchases go into a company. The average company with outstanding mortgages, now holds 3.3 mortgaged properties,’ stated the report.

Over the last 12 months to September 2022, a total of 50,445 new companies were set up to hold buy-to-let property, the second highest figure in any 12-month period.  However, the total number of active buy-to-let companies increased more slowly than this. This is because 8,902 companies were dissolved, predominantly due to the sale of all the properties being held within the company, a figure which is up 25% on the previous 12 months.

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