The average BTL company has been operating for 9.2 years, a figure which has fallen amid the rising number of new incorporations over the last five years.
2021 saw a record number of companies set up to hold buy-to-let (BTL) property, with 47,400 incorporated in 2021 across the UK, according to Companies House data analysed by Hamptons.
This is nearly twice the number set up in 2017, when it was announced that investors with properties in their personal names would no longer be able to claim mortgage interest as an expense.
However, the rate of growth in new incorporations fell compared to previous years, with a 14% increase recorded between 2020 and 2021, down from a 30% increase recorded between 2019 and 2020.
While the number of BTL companies running in the UK passed through the 200,000 mark as the country emerged from the first lockdown, by 2021 this figure rose to a new total of 269,300.
61% of these companies were set up since the withdrawal of mortgage interest relief in April 2017.
The average BTL company has been operating for 9.2 years, a figure which has fallen amid the rising number of new incorporations over the last five years.
At the other end of the scale, 7,900 (3%) of the companies have been running for more than 50 years, while 440 have been going for more than a century.
Hal (50%) of new BTL mortgages in 2021 were taken out by a company rather than someone buying in their personal name, and 40% of these new purchases went into a company which was less than a year old.
Buy-to-let companies currently hold a total of 583,000 mortgaged properties, accounting for around 29% of all existing buy-to-let mortgages nationally.
This figure has increased from 26% over the last 12 months.
The bulk of new BTL companies set up in 2021 were in London and the South East, with the two regions together accounting for 45% of all new incorporations.
Only the North East, the cheapest region in the country, saw fewer companies set up in 2021 than in 2020, falling by 6%.
Northern Ireland (36%) saw the biggest annual increase, albeit from a low base.
While the number of BTL incorporations has continued to grow, around 25,100 have closed their doors since the onset of the pandemic.
15,200 companies closed in 2021, which equates to around 6% of all buy-to-let companies up and running today. The average company closed down after 5.8 years.
An annual growth figure of 7.2% was recorded in December 2021, meaning that rents were rising at around twice the rate recorded in December 2020.
This compares to a peak of 8.7% in July 2021 and 7.9% in November 2021.
For the sixth month running, rents grew faster in the South West (12.8%) than in any other region. This growth means that average rents have now surpassed £1,000 per month in all four Southern regions of Great Britain.
Inner London rents rose 8.6% over the last 12 months, the fastest rate since March 2016. As a result, the average rent was 2.0% below where it was on the eve of the pandemic in January 2020.
Meanwhile, rental growth (3.7%) in Outer London has remained considerably more stable.
Aneisha Beveridge, head of research at Hamptons, said: “The way buy-to-let investors hold property has changed, with the impact of the tax changes made five years ago still shaping landlord buying behaviour today.
"But despite record numbers of rental homes being held in companies, the growth in buy-to-let businesses has come from smaller landlords rather than larger institutions who made up most buy-to-let company owners pre-2016.
"Today, only 20% of buy-to-let businesses hold more than three mortgaged properties, a similar profile to landlords who hold homes in their personal name.
“The number of new buy-to-let incorporations in 2021 is probably close to its peak, with fewer likely to be set up in 2022.
"This is partly a product of last years’ stamp duty holiday which served to slow the fall in new investor numbers.
"Additionally, many investors who have wanted to make tax savings by transferring properties from a personal to a company name have had five years to do so.
“With average rents in all four Southern regions now surpassing £1,000 per month, the North-South divide in the rental market has never been wider.
"The recent recovery in London rents, coupled with strong ongoing growth across Southern England has seen the gap in rents between Northern and Southern England grow from 35% or £200 per month to 50% or £350 per month over the last decade.”
