According to analysis of Companies House data by the estate agency Hamptons, September 2024 saw 5,312 new limited companies established for BTL purposes in Great Britain, at least 28% more than in any previous September.
Between January and September 2024, a total of 46,449 companies were set up, representing a 23% rise compared to the same period in 2023.
This also means that more companies have been set up so far this year than in the whole of 2021. At the current rate, Hampton’s estimate that between 60,000 and 62,000 limited companies will have been created by the end of 2024, surpassing the total of 50,004 created last year.
Over the last year, we have seen most of our landlord clients who weren’t set up as limited companies, do so, plus many have also sought to achieve higher yields and so diversified their portfolio incorporating HMOs, as well as semi-commercial and commercial units. Thus, they now fall into the ‘specialist BTL’ sector.
Despite tougher lending conditions brought on by higher interest rates which in turn has made ICRs sometimes challenging, the market has proved resilient with landlords taking advantage of opportunities and lenders showing a willingness to lend.
As reported recently, again by Hamptons, 10.7% of sales agreed in November across Great Britain went to a landlord, above the 10.2% to-date average of 2024.
This also demonstrates that investors not deterred by the SDLT increase because this has been offset by the rental increases landlords are achieving. According to Hamptons, between November 2020 and November 2024, rents rose by a total of 31.6%.
Recent ONS figures state that the average private rent is £1,348 (8.8%) in England, £766 (7.9%) in Wales, and £976 (6.6%) in Scotland, in the 12 months to October 2024. In England, rents inflation was highest in London (10.4%).
Labour’s housebuilding target is ambitious, but landlords understand the headwinds this policy faces and so appreciate that the demand for homes to buy and to rent will remain due to the growth in population through migration.
However, specialist BTL can be more complex and we have experienced many more landlords coming to us because their existing brokers have been unwilling or unable to support them.
It’s an area that we have worked in for many years and the experience we have built during varying market conditions is proving invaluable and helping us help our landlords clients navigate the complexities now faced.