Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

Buy-to-Let Company Boom Goes Into Reverse After 18 Years

The number of new buy-to-let companies is on course to fall for the first time since 2008, as the rush by existing landlords to incorporate their portfolios loses momentum. Landlords set up 41,483 buy-to-let companies across Great Britain during the first eight months of 2026, 8% fewer than the 44,802 created over the same period last year, according to new analysis from Hamptons.

Incorporation slowdown accelerates

The slowdown accelerated in August, with new incorporations falling 22% year-on-year, from 5,363 to 4,198. If the trend continues, 2026 will record the first annual decline in new buy-to-let company formations for 18 years.

However, the overall number of buy-to-let companies continues to increase. There were 469,165 operating across Great Britain at the end of August, up from 443,272 at the end of 2025, and new formations are still running at around eight times the level recorded a decade ago.

Portfolio transfers slow

Hamptons says the change largely reflects a slowdown in landlords transferring personally owned properties into limited companies. Changes to landlord taxation from 2016 onwards, in particular restrictions on mortgage interest tax relief, helped drive the incorporation boom by making personal ownership less attractive to many higher-rate taxpayers.

Much of the growth came from existing investors restructuring their portfolios rather than buying additional properties. Around 81,800 properties entered buy-to-let limited companies across England and Wales during 2025, of which around 43,400 (53%) were transferred from personal ownership. Hamptons estimates the average Stamp Duty Land Tax bill on these transfers was around £28,000, based on an average property value of £380,000, generating an estimated £1.2bn for the Treasury.

Hamptons believes the market has now passed the peak for portfolio transfers. Many landlords who stood to gain most from incorporation have already made the switch, while others can face significant upfront costs, as transferring a property may trigger both stamp duty and Capital Gains Tax. New purchases are beginning to account for a larger proportion of properties entering company structures: Hamptons estimates 51% of properties entering buy-to-let companies so far this year were new purchases rather than transfers. Future incorporation levels are likely to depend more heavily on landlords buying additional properties and overall investor sentiment.

New-let rents accelerate

Meanwhile, Hamptons recorded another acceleration in rental growth during August. The average rent on a newly let property across Great Britain reached £1,419 per month, up 2.4% year-on-year. It was the tenth consecutive month in which the annual growth rate increased, and the fastest pace since November 2024.

Markets outside London led the increase, with new-let rents rising 5.4% in the South West and 3.7% in the South East. In the North, average rents on newly let properties exceeded £1,000 per month for the first time, reaching £1,014, 2.8% higher than the £986 recorded a year earlier. Greater London remains considerably more expensive, with the average new-let rent reaching £2,334, though annual growth was more subdued at 1.2%.