Landlords turn to incorporation as Renters’ Rights Act approaches

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Landlords turn to incorporation as Renters’ Rights Act approaches

Buy-to-let incorporation is set to boom ahead of the Renters’ Rights Act coming into force, claims software company.

Data by Propoly reveals the number of companies being set up to hold buy-to-let properties has increased every year since 2015, with annual increases of up to 35.9%.

The company says for many landlords, with the Renters’ Rights Act just around the corner, incorporation is emerging as a popular strategy.

Renters’ Rights Act is playing an important role

According to the data, analysed data on the number of companies that are set up each year to hold buy-to-let properties in the UK, and found that an estimated total of 401,744 such companies were operational in 2025.

This marked an annual increase of 13.7%, equivalent to the creation of an additional 48,252 companies compared to 2024.

Propoly has forecast that in 2026, the number of companies is going to increase by a further 7.6%. This will see the creation of another 30,354 companies, bringing the UK total to 432,098.

Sim Sekhon, group CEO at Propoly, said: “While tax efficiency has been a major driver behind the rise in incorporation, the upcoming Renters’ Rights Act is now playing an increasingly important role in how landlords are choosing to structure and manage their portfolios.

“As the sector becomes more regulated, many landlords are recognising the need to operate in a more formal, business-like way, and a limited company structure naturally supports that shift.

“The Renters’ Rights Act is expected to introduce stronger tenant protections and place greater obligations on landlords, from tenancy management through to compliance and dispute resolution. For many, this will mean tighter margins and a greater administrative burden, which is prompting a reassessment of how their portfolios are run.”

More landlords to consider a company structure

He adds: “Operating through a company can provide a clearer framework for managing these responsibilities, while also allowing landlords to take a longer-term, more strategic view of their investments.

“It enables better organisation of finances, easier reinvestment, and a structure that is more aligned with running a professional rental business rather than holding property as a sideline.

“That said, incorporation still isn’t the right move for everyone. There are additional costs, tax considerations, and lending challenges that need to be carefully evaluated. But as legislative change continues to reshape the private rental sector, we expect more landlords to consider whether a company structure offers the resilience and flexibility they need to adapt.”

Important context: Property118 is not currently recommending Section 162 incorporation for landlords with mortgages while legal uncertainty remains over the treatment of mortgage liabilities. Read our current position here: Why Property118 is not currently recommending s162 incorporation to landlords with mortgages

A conversation worth having?

If you are weighing up your own strategy, whether that’s to sell, expand, or restructure to improve profitibility, it is worth having a discussion with a Property118 consultant to take a closer look at how your portfolio is structured as a whole now, and to forecast the outcomes based on multiple scenario’s.

These conversations are typically most useful for landlords with established portfolios and relatively modest borrowing who are beginning to reflect on how their assets could work more effectively in the years ahead.

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