The rapid growth in buy-to-let company formations may have peaked, according to new analysis by Hamptons, with 2026 on course to mark the first full-year decline in new incorporations since 2008.
Hamptons' Monthly Lettings Index for August shows that 41,483 buy-to-let companies were set up across Great Britain in the first eight months of 2026, an 8% fall from the 44,802 established over the same period in 2025. August saw a particularly sharp contraction, with incorporation numbers dropping 22% year-on-year, from 5,363 to 4,198. That decline pushed buy-to-let businesses down to the fifth most common type of company registered during the month, compared with second place in 2025.
The transfer wave that drove the boom
A large part of the growth in buy-to-let company numbers over recent years has not come from new investors but from existing landlords shifting properties they already owned out of personal names and into limited company structures.
Major tax changes from 2016 onwards, most notably the restriction of mortgage interest tax relief, reduced the advantages of holding rental property personally and made corporate ownership more attractive for higher-rate taxpayers. Since then, rising personal property income tax rates and frozen personal allowance thresholds have pushed more landlords into higher-tax brackets, reinforcing the appeal of limited companies.
In 2025, around 81,800 properties were placed into buy-to-let limited companies across England and Wales, either through purchase or transfer. The majority, some 43,400 properties or 53% of the total, were personal-to-company transfers by existing owners rather than new buy-to-let purchases. With average Stamp Duty Land Tax bills on those transactions running at approximately £28,000, based on an average price of £380,000, the transfers generated around £1.2 billion for the Treasury annually.
A turning point for new formations
Hamptons' analysis indicates the market has now passed the peak of those portfolio transfers. Most landlords who stand to benefit from incorporating have already made the move, while lower-rate taxpayers or those planning shorter-term exits often find the upfront costs of transferring into a company, which generally trigger both stamp duty and capital gains tax, unviable.
As a result, 2026 is projected to mark a structural shift: over half of all properties entering a limited company structure this year are expected to be new purchases rather than transfers, with Hamptons estimating that 51% of homes placed into buy-to-let companies so far in 2026 were new acquisitions.
Despite the slowdown in creation rates, the total stock of buy-to-let companies continues to grow. By the end of August, 469,165 buy-to-let businesses were operating across Great Britain, up from 443,272 at the end of 2025, as new incorporations continued to outstrip closures. Even so, annual formation figures are likely to remain below the 2025 peak, and the Treasury's stamp duty revenues from corporate buy-to-let transfers are expected to fall as a consequence.
Aneisha Beveridge, head of research at Hamptons, said: "A large part of the buy-to-let incorporation boom was driven by the one-off structural shift whereby existing landlords transferred properties they already owned into limited company structures in response to tax changes.
"But we're now reaching the tail end of that trend. Increasingly, the landlords who stand to benefit financially from incorporating existing properties have already done so.
She added: "While limited companies remain the preferred structure for most new investors entering the market, it's likely that new company formations peaked in 2025. Moving forward, growth is likely to increasingly depend more on landlords making new purchases than restructuring portfolios. That also means the Treasury's Stamp Duty windfall from these transfers is likely to start falling."
Rental growth accelerates outside London
Elsewhere in the index, the pace of annual rental growth for tenants moving into a new property accelerated for the tenth consecutive month. Rents across Great Britain rose 2.4% over the 12 months to August, reaching £1,419 per month, the fastest level of growth since November 2024. Growth was led by markets outside London, with tenants in the South West recording the sharpest increase at 5.4%, followed by the South East and North at 3.7% and 2.8% respectively.
August also marked the first time rents for new lets in the North of England passed £1,000 per month, rising 2.8% year-on-year from £986 to £1,014. Average monthly rents in the Midlands crossed four figures earlier, in April 2024.
The average rent increase for existing tenants where one took place remained stable at 5.6%, with Scotland recording the largest rises anywhere in Great Britain at an average of 6.9% in August. Meanwhile, all tenants, including those who had not moved, paid an average of £1,260 per month, some £159 less than those moving to a new let.
Beveridge concluded: "Rental growth for new lets has been steadily gathering pace for nearly a year now, with much of that increase being driven by markets outside London. The arrival of the Renters' Rights Act seems to be adding further pressure. Higher compliance costs and extra administration have left prospective tenants facing increased prices to secure new tenancies, even while existing renters are seeing more modest increases."
