Number of company landlords accelerates past record high – Mortgage Strategy

Nearly 14,000 new landlord businesses were registered in the first five months of this year, analysis of Companies House shows.

Last year, the number of registrations of new buy-to-let businesses hit a record high of 34,128, according to research by specialist insurer Just Landlords.

This was almost 70% higher than the five-year average of 23,549 per year.

Looking back further, Just Landlords found that the annual number of buy-to-let companies registered has soared by 1,700% since the year 2000, when only 1,882 were incorporated.

The pace of growth has accelerated sharply in recent years, with the 2020s already accounting for more new landlord businesses than the entire period from 2000 to 2019.

Changes to mortgage interest tax relief, higher stamp duty costs and other regulatory changes have been driving factors behind the trend.

The introduction of the 3% stamp duty surcharge on additional properties in April 2016 triggered an immediate surge in incorporations, with registrations jumping by nearly 59% in the following two years.

While London remains the single largest market, accounting for nearly a third of all registrations since 2000, the regional picture is shifting.

The capital’s share of annual registrations has been declining in recent years, as growth accelerates across the rest of the country.

The devolved nations have seen some of the most dramatic recent growth, with Scotland’s annual registrations more than tripling since 2020 (+171%), and Northern Ireland (+148%) and Wales (+144%) following closely behind.

Scotland now records over 2,100 new landlord companies per year, up from fewer than 400 in 2015.

Just Landlords managing director Clark Ross says: “The scale of this shift is remarkable. 

“We’re seeing clear evidence of the continued professionalisation of the private rented sector, with a growing number of landlords now operating through formal business structures.

“What’s particularly interesting is that growth is no longer concentrated in London alone.

“Some of the strongest increases have been seen across Scotland, the Midlands and the North of England, suggesting that professional landlord businesses are becoming an increasingly important part of regional housing markets across the UK.

“There are a number of factors that may be driving this shift. London’s property values have long made it the dominant market, but the comparatively lower entry costs in regional cities mean landlords can build a more diversified portfolio for the same initial outlay, and potentially see stronger yields in the process. 

“Rising house prices in the South have also pushed more renters into regional markets, increasing demand and making those areas more attractive to professional investors.”