Despite a sharp fall in the number of homes bought by landlords in 2023, the number of limited companies set up to hold buy-to-let properties continued to rise. Last year a record 50,004 limited buy-to-let companies were set up across the UK surpassing 2022’s previous record (48,540) by 3%, according to Hamptons.

The firm said that 2023 was a year of two halves. In the first half of the year following the aftermath of the mini-budget, the number of new buy-to-let incorporations ran at around 2% below the same period in 2022. However, as more investors began to face higher mortgage rates, the number of limited companies set up to hold buy-to-let homes picked up in the second half of 2023 to run at 9% above 2022 levels.

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 primarily reflects the bigger difference here in tax rates paid by individual landlords and limited companies.

The South West and North East were the only two regions of the UK to record a small fall in the number of new limited companies set up, although in both regions the number of homes owned in a corporate structure continued to rise. A record 58% of limited company buy-to-lets in the North East were held in a company that was set up outside the region, the highest proportion in any region. This reflects how landlords from across the UK are targeting higher yielding buy-to-lets, particularly in the North of England. 

The rising number of incorporations means that at the start of 2024 there were 345,426 active limited companies designed to hold buy-to-let property in the UK, up 11.6% from 309,643 at the beginning
of 2023.