Jagaul.com Real Estate 50,000 buy-to-let companies set up 2023

50,000 buy-to-let companies set up 2023

Over 50,000 buy-to-let companies were set up in 2023, highlighting that the limited company model is becoming more dominant in the UK.

Despite the market seeing a downtown, the number of companies established rose from 48,500 in 2022.

Buy-to-let companies now own a total of 615,077 properties in the UK, an 82% increase since the end of 2016.

That’s when tax changes came into force that made using a limited company a more tax efficient way of renting out a property.

Aneisha Beveridge, head of research at Hamptons, said: “Despite last year’s slowing sales market, there was no let-up in landlords rushing to incorporate.

“Rather, the record number of companies set up to hold buy-to-let homes suggests a long-term commitment from landlords – particularly given the upfront costs associated with incorporating.

“The growth has been driven mostly by existing landlords moving properties into a corporate structure to shelter themselves from higher interest rates. Meanwhile the number of new landlords setting up shop has remained relatively muted.”

Scotland recorded the largest pick-up, with an 8.4% year-on-year uplift in the number of new companies set up, a larger increase than any other region of the UK. This reflects the bigger difference in tax rates paid by individual landlords and limited companies.

Most of the growth in buy-to-let incorporations over the last year has come from smaller landlords.

Over the last 12 months, there was a 21.9% increase in the number of homes held in companies with a single property.

This compares to a 3.8% increase in the number held by companies owning 20+ homes.

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