The shift towards company ownership in the buy-to-let sector is accelerating, as landlords respond to tax pressures and incoming regulation.
New research from Propoly forecasts a 7.6% rise in the number of limited companies set up to hold rental portfolios in 2026, pushing the total to more than 432,000.
The data shows that 401,744 such companies were in operation in 2025, up 13.7% year-on-year, equivalent to more than 48,000 new incorporations.
The trend has been building for a decade, with company ownership increasing every year since 2015.
TAX CHANGES
The shift was initially driven by tax changes introduced under Section 24 of the Finance (No.2) Act 2015, which restricted mortgage interest relief for landlords operating in their personal name.
As a result, higher-rate taxpayers have increasingly turned to corporate structures, where mortgage interest remains fully deductible as a business expense.
Company ownership can also offer lower effective tax rates, with corporation tax typically charged at 19% or 25%, compared with income tax rates of up to 45% for individuals.
PORTFOLIO GROWTH
Beyond tax, landlords are also using company structures to support portfolio growth and simplify management. Incorporation allows profits to be retained and reinvested more efficiently, while separating personal and business finances. It can also support borrowing for larger portfolios, with lenders often preferring more structured arrangements.
The latest forecast suggests that regulatory change is now adding further momentum. The Renters’ Rights Act is expected to increase compliance requirements across the private rented sector, prompting more landlords to adopt a business-like approach to portfolio management.
However, incorporation is not without drawbacks. Mortgage rates for company buy-to-let loans are often higher, while transferring property into a company can trigger stamp duty and capital gains tax liabilities. There is also added complexity when extracting profits through dividends.
REGULATED SECTOR
Sim Sekhon (main picture, inset), Group CEO at Propoly, says: “While tax efficiency has been a major driver behind the rise in incorporation, the upcoming Renters’ Rights Act is now playing an increasingly important role in how landlords are choosing to structure and manage their portfolios.
“As the sector becomes more regulated, many landlords are recognising the need to operate in a more formal, business-like way, and a limited company structure naturally supports that shift.
RENTERS’ RIGHTS ACT
“The Renters’ Rights Act is expected to introduce stronger tenant protections and place greater obligations on landlords, from tenancy management through to compliance and dispute resolution.
“For many, this will mean tighter margins and a greater administrative burden, which is prompting a reassessment of how their portfolios are run.
“Operating through a company can provide a clearer framework for managing these responsibilities, while also allowing landlords to take a longer-term, more strategic view of their investments.”
EASIER REINVESTMENT
And he adds: “It enables better organisation of finances, easier reinvestment, and a structure that is more aligned with running a professional rental business rather than holding property as a sideline.
“That said, incorporation still isn’t the right move for everyone. There are additional costs, tax considerations, and lending challenges that need to be carefully evaluated.
“But as legislative change continues to reshape the private rental sector, we expect more landlords to consider whether a company structure offers the resilience and flexibility they need to adapt.”
