The buy-to-let industry surpassed a major milestone in February for the first time (Image: GETTY)
Buy-to-let firms have officially become the largest single type of business in the UK. There are nearly four buy-to-let companies for every fast food takeaway business and four times as many as there were in 2016.
The industry marked a major milestone in February as it passed the 400,000 companies mark for the first time, with 401,744 companies currently registered with Companies House. But what’s pushing this unprecedented surge?
Unsurprisingly, a need to keep tax bills down has seen many landlords putting their properties under companies instead of their personal names to squash their tax liabilities.
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This also means that while the industry is growing, it’s not necessarily due to new opportunities or housing but rather existing homeowners changing the way they hold their properties. There are currently 680,000 buy-to-let properties in a limited company structure across England and Wales.
This usually rises between 70,000 and 100,000 a year but, according to research by Hamptons, reported by the , this could start to slow soon. This would be due to the stamp duty changes next month, alongside falling rates, which might encourage landlords to keep the homes in their own names, according to the experts.
A slow-down in rent growth is also squeezing landlords into tighter margins ahead of changes. In fact, some of the priciest rental areas have even “seen rents go backwards”.
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Aneisha Beveridge, head of research at Hamptons, explained: “Londoners, in particular, have seen rents go backwards, with inner London rents now falling at about half the pace they did during the pandemic. This means some tenants who moved relatively recently may be able to find themselves a better deal by moving again.”
This has been a welcomed relief for many who have been facing double-digit increases over the last few years. In February, the monthly rent on a new let rose by just1% to £1,355 across Britain.
This is the lowest rate since September 2020, when rent started going back into the green after its short, sharp, fall at the start of the pandemic.