Massive spike in new Buy-to-Let incorporations

Posted: 13/2/2022

This is nearly twice the number that were set up in 2017 when it was announced that investors with properties in their personal names would no longer be able to claim mortgage interest as an expense.  While individual landlords are effectively taxed on turnover, company landlords are taxed on profit.  This has meant that for some landlords – particularly those who are higher rate taxpayers – it has become more profitable to move their buy-to let into a company.

While the number of buy-to-let companies up and running in the UK passed through the 200,000 mark as the country emerged from the first lockdown, by 2021 this figure rose to a new total of 269,300.  61% of these companies have been set up since the withdrawal of mortgage interest relief which began in April 2017.

Half – 50% – of new buy-to-let mortgages in 2021 were taken out by a company rather than someone buying in their personal name, meaning we estimate that around half of all new landlord purchases last year used a company to hold their buy-to-let.  40% of these new purchases went into a company which was less than a year old, suggesting newer landlords still account for a sizable proportion of growth.

Buy-to-let companies currently hold a total of 583,000 mortgaged properties, accounting for around 29% of all existing buy-to-let mortgages nationally.  This figure has increased from 26% over the last 12 months.

Northern Ireland, at 36%, has seen the biggest annual increase in the number of new buy-to-let companies set up, albeit from a low base.

However, before you run out and open a limited company we do advise speaking to both an accountant and mortgage advisor.

If you are thinking of buying to let, we offer free, impartial advice. 

Back to News

 Click here for a competitive quote for Landlords Insurance  property-ombudsman NI Tourism Certified Accommodation to Rent