Is the slowdown in limited company BTL really a cause for concern?

The number of new BTL companies established during the first eight months of 2026 fell by 8% compared with the same period last year, according to Hamptons. August alone saw a 22% decline, which is quite a turnaround for a part of the market that has spent much of the past decade breaking records.

Those figures might raise questions about landlords’ appetite for further investment, although I’m not convinced they tell us quite as much about the health of professional BTL as some might suggest. If a landlord already has a company holding 10 properties, there’s no particular reason why they would need to establish another business to purchase an eleventh.

Changes to the tax treatment of mortgage interest have encouraged landlords to reconsider how they own property over the years, and many have already incorporated. At some point, the pace of new company formations was bound to ease, particularly as more investors completed that process.

A decade of incorporation

Hamptons’ research puts the scale of that change into perspective. There were 469,165 active property businesses in Great Britain at the end of August, with around eight times as many BTL companies being established today as a decade ago.

Lendlord’s Q3 2026 research provides some further context. It found that 45.1% of BTL ownership within its dataset was held through limited companies, rising to 51% among landlords with 11 to 20 properties and 57.6% for those with portfolios of more than 20.

That gives us a reasonable indication of how established company ownership has become among larger landlords. Somebody with one or two properties may have very different reasons for investing from somebody managing a portfolio worth several million pounds, and their financing requirements are unlikely to be the same either.

What are those companies actually doing?

There’s another finding in the Hamptons research worth considering. During 2025, 53% of properties entering limited companies were existing properties being transferred from personal ownership, whereas in 2026, new purchases have accounted for 51% of properties entering companies.

That suggests the balance between incorporation of existing holdings and new acquisitions is changing. It doesn’t tell us how much established companies are investing overall, but it does indicate that the activity taking place within the limited company market deserves as much attention as the number of businesses being registered.

The landlords we work with at Molo are generally looking quite carefully at what they already own and where another property might fit. They’re examining rental income against current borrowing costs, paying close attention to local tenant demand and considering whether a purchase will complement their existing holdings.

For some, that means refinancing conventional BTL properties to make better use of their capital. Others are looking at HMOs or mixed-use investments, where the income potential may be appealing but the property itself requires a different approach to financing.

A broader range of investments

We introduced semi-commercial lending at Molo earlier this year because brokers were bringing us cases involving landlords whose requirements extended beyond conventional residential property. These weren’t necessarily investors abandoning BTL, but people who understood property investment and wanted to consider assets that offered something different.

Take a property with a shop on the ground floor and residential accommodation above it. The combination of commercial and residential tenants can provide an attractive income profile, although the assessment needs to account for the different tenancies, the property itself and the borrower’s experience.

Foreign national investors are another important part of the market. Some are purchasing their first UK investment property, while others already have established holdings and are considering further acquisitions. Their circumstances can involve overseas income or different residency arrangements, so the mortgage application may require additional information.

We’ve developed our foreign national proposition at Molo to support these borrowers, and the quality of the initial application can make a considerable difference. A broker who understands the lender’s requirements and establishes the relevant details early can save a great deal of unnecessary work later on.

Investment doesn’t end with incorporation

There will undoubtedly be landlords who decide that the costs and responsibilities of property ownership no longer justify further investment. Some will sell properties, while others may concentrate on managing what they already have, and I don’t think we should underestimate the pressures behind those decisions.

But the professional landlord market is considerably more established than it was a decade ago. Many investors have already made decisions about company ownership and are now concentrating on the performance of their properties, rather than the structure through which they hold them.

I think that’s where brokers have a particularly valuable understanding of what’s happening. They can see which landlords are refinancing, which are releasing capital for another purchase and where investors are finding opportunities that justify the borrowing involved.

Company formation figures will continue to tell us something about the number of new businesses entering the market, and they’re worth paying attention to. But if we’re trying to understand the appetite for investment among professional landlords, I’d be more inclined to look at the activity taking place within the companies that are already there.