It claimed that if the current trajectory continued into the end of 2026, it would mark the first full-year decline in BTL company formations since 2008.
Although, the report also emphasised: “Despite the slowdown, around eight times as many buy-to-let companies are being set up today than a decade ago, reflecting the fact that limited companies often remain the most tax-efficient way for landlords to hold property.”
August sees most critical drop
August marked a significant downturn for BTL incorporations, which fell 22% year-on-year to 4,198.
The drop pushed the sector from being the second-most common business type set up last year to fifth place in 2026.
Industry, not regulation, must lead later life lending change
Sponsored by Suffolk Building Society Intermediaries
At the same time, slowdowns in creations did not disrupt the overall increase of BTL businesses.
The number of BTL companies operating across Great Britain rose from 443,272 at the end of 2025 to 469,165 by August 2026, with incorporations exceeding closures over the period.
Portfolio transfers move past their peak
According to Hamptons, the slowdown in new BTL company incorporations suggests many landlords who stood to benefit from the tax advantages of limited company ownership have already made the move.
In 2025, around 81,800 properties were placed in BTL limited companies across England and Wales, either through purchase or transfer. Some 53% were transferred from personal ownership rather than acquired as new BTL investments.
Hamptons believes the market has now moved beyond the peak of these portfolio transfers, which have been a key driver of growth in BTL company numbers in recent years.
The firm described 2026 as a “turning point”, estimating that 51% of homes entering a limited company structure so far this year have been new purchases rather than transfers. As a result, the sector is on course for acquisitions to become the primary source of growth in BTL companies for the first time.
Hamptons said: “Our analysis indicates that the market has now passed the peak of existing portfolio transfers. Most landlords who benefit from incorporating have already made the transition, whereas lower-rate taxpayers or those planning short-to-medium-term exits often find the upfront transfer costs into a limited company unviable.”
While limited company structures remain the preferred route for most new BTL investors, Hamptons expects incorporation levels to remain below the record highs reached in 2025 as the wave of portfolio transfers subsides.
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: “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.”
