Over 25,000 rental properties were listed for sale in January 2025 alone — a 50% jump from the year before. That number tells you something important: a lot of individual landlords are walking away. I’ve been watching this shift for a while now, and the pattern is clear. The rules that made personal buy-to-let workable have changed, and the people who are staying in the game are doing it differently. They’re moving their properties into limited companies and signing corporate lets instead of traditional tenancy agreements. Here’s what you actually need to know.
If you’re a landlord who’s been feeling squeezed, you’re not imagining it. The old model of renting out a property on an Assured Shorthold Tenancy (AST) is becoming harder to run profitably. The Rent Reform Act has brought tougher compliance, expanded tenant rights, and tighter restrictions. Meanwhile, Section 24 of the Finance Act removed the ability to deduct full mortgage interest as an expense for individual landlords. A property lawyer can help you navigate the legal side of restructuring, but the financial case for switching is strong enough that many landlords are already making the move.
What a corporate let actually is
The most important thing to understand is that a corporate let isn’t a residential tenancy at all. The tenant is a business — a limited company — not an individual person. That means the agreement is governed by commercial contract law, not residential housing legislation. The Rent Reform Act doesn’t apply to it. You can agree fixed terms, build renewal clauses into the contract, and include robust conditions like no pets, no smoking, and business-use only. These terms cannot be overridden by housing legislation the way they can in an AST.
What I’d do if I were starting today: set up an SPV, buy the property through it, and let to a corporate tenant from day one. You avoid the headache of transferring an existing property later, which can trigger Capital Gains Tax and Stamp Duty Land Tax. The structure is cleaner from the start.
Why the old model is falling apart for individual landlords
The biggest single change was Section 24 of the Finance Act. Before it, individual landlords could deduct their full mortgage interest as an expense. Now they receive a basic rate tax credit instead. For a higher-rate taxpayer paying 40% income tax, that difference is enormous. A landlord with a £10,000 mortgage interest bill used to deduct the full amount. Now they get a 20% tax credit worth £2,000 — and pay tax on the remaining £8,000 at their marginal rate. That’s a £3,200 tax bill instead of zero.
On top of that, the Rent Reform Act has made ASTs open-ended by default. Tenants can leave with short notice, and landlords lose long-term security. Section 21 — the no-fault eviction route — has been abolished. Regaining possession from a residential tenant is now slower and more regulated. Corporate lets operate differently. If a company tenant stops paying rent, you enforce the contract directly under commercial breach-of-contract rules. No residential eviction process, no tribunal routes, no enhanced tenant protections.
I’ve seen landlords with modest portfolios realise they’re effectively working for the taxman. The numbers don’t lie. If you’re a higher-rate taxpayer with a mortgage on your rental property, the limited company structure almost certainly saves you money. The kind of tenants who rent through corporate lets — serviced accommodation operators, care providers, relocation agencies, NHS contractors — tend to be more professional, more accountable, and less likely to cause disputes than individual renters.
Where landlords get tripped up
Most of the mistakes I see come from assuming the switch is simple. It isn’t, and getting it wrong can be expensive.
Thinking you can just transfer properties tax-free
Transferring an existing property from your personal name into a limited company is a disposal for tax purposes. It triggers Capital Gains Tax on any increase in value since you bought it, and Stamp Duty Land Tax on the market value. Some landlords assume they can do it at cost or avoid the charge. They can’t. The tax bill can run into tens of thousands of pounds. You need to model the numbers carefully before you move.
Ignoring the higher mortgage rates on company products
Limited company mortgages often carry slightly higher interest rates and arrangement fees than personal-name products. Lenders see them as slightly riskier. The difference might be 0.5% to 1% on the rate. That eats into your margin. You need to factor it into your projections. If the tax saving is big enough, the higher rate still works out in your favour. But if your profit margin is thin, the higher rate could wipe out the benefit.
Not understanding the corporation tax bands
Corporation tax isn’t a flat rate. It’s 19% on profits up to £50,000, then it rises gradually to 25% on profits over £250,000. If your company’s profit falls in the marginal relief band, the effective rate is somewhere between 19% and 25%. A financial advisor can help you plan the profit extraction strategy, but the key point is that you don’t just pay 19% on everything. Plan for the actual rate you’ll pay.
Forgetting about extraction tax when you want the money
Money in the company isn’t money in your pocket. If you want to take profits out, you pay yourself a salary or dividends. Dividends are taxed at your personal dividend allowance rate. If you’re a higher-rate taxpayer, that’s 33.75% on dividends above the allowance. The total tax — corporation tax plus dividend tax — can end up close to what you’d pay as an individual. The real advantage comes when you reinvest profits in more properties rather than taking them out.
→ Scroll right to see all columns
| Factor | Individual Landlord | Limited Company (SPV) |
|---|---|---|
| Mortgage interest relief | Basic rate tax credit only | 100% deductible as expense |
| Tax rate on profits | 20–45% income tax | 19–25% corporation tax |
| Tenancy type | AST (residential) | Corporate let (commercial) |
| Eviction process | Section 8 only (slower) | Commercial breach of contract |
| Rent increase rules | Section 13 regulated | Contractually agreed |
| Liability | Personal assets exposed | Limited to company |
What I’d do: run the numbers for your specific situation before you make any decisions. A landlord with one low-leverage property who plans to sell in a few years probably shouldn’t bother with a company structure. A portfolio landlord with multiple mortgaged properties who plans to hold long-term almost certainly should.
How to make the switch to corporate lets
Writing about topics like this takes real time and research. If you buy something through an Amazon link on this page, I may earn a small commission — at no extra cost to you. It’s one of the things that makes it possible to keep BritWealth free to read. I only link to products that are genuinely relevant to the article.
Set up your Special Purpose Vehicle
You need a limited company set up specifically for property investment. A standard trading company won’t do — lenders want to see an SPV. You can register one through Companies House for a small fee. The company’s objects should include “buying, selling, letting, and managing property.” Most accountants who specialise in property can handle this for you. The process takes a few days. Once it’s registered, you open a business bank account and apply for a limited company mortgage.
Find the right corporate tenant
Corporate tenants aren’t hard to find if you know where to look. Serviced accommodation operators, care providers, corporate relocation agencies, NHS contractors, and construction firms all need properties on fixed-term commercial leases. They typically offer guaranteed rent, better accountability, and higher property care standards than individual tenants. You can find them through commercial letting agents or by approaching companies directly. The contract should be drafted by a solicitor who understands commercial property law. A tenant landlord lawyer can review the agreement to make sure your interests are protected.
Structure the contract for maximum protection
Because corporate lets fall under commercial contract law, you can include clauses that would be unenforceable in a residential tenancy. No pets, no smoking, business-use only, minimum maintenance standards, inspection and access requirements — all of it sticks. You can also build in annual rent reviews, inflation-linked increases, and performance-based adjustments. No rent caps, no Section 13 process. The contract is king. Make sure it’s watertight.
Plan your exit and extraction strategy
If you ever want to sell the property, you can sell the shares in the company rather than the property itself. That avoids Stamp Duty Land Tax for the buyer and can be more tax-efficient for you. If you want to take profits out, dividends are the usual route. But the real power of the structure is reinvestment. Keep profits in the company, buy more properties, and grow the portfolio. That’s how you build long-term wealth rather than just generating taxable income.
- 1Register your SPVSet up a limited company with property investment as its stated object. Open a business bank account.
- 2Secure a limited company mortgageApply through a broker who specialises in SPV lending. Rates are slightly higher than personal mortgages.
- 3Draft a commercial leaseUse a solicitor to create a fixed-term corporate let agreement with robust clauses and rent review provisions.
- 4Find your corporate tenantApproach serviced accommodation operators, care providers, or relocation agencies. Use a commercial agent if needed.
What I’d do: start with one property. Set up the SPV, buy the property through it, and let it to a corporate tenant. See how the numbers work in practice before you transfer your whole portfolio. The learning curve is real, but the structure is worth it for the right landlord.
Frequently asked questions
Can I move my existing properties into a limited company without paying tax? ▾
Do corporate lets fall under the Rent Reform Act? ▾
What happens if a corporate tenant stops paying rent? ▾
Is a limited company mortgage more expensive than a personal one? ▾
Who should not use a limited company for buy-to-let? ▾
The shift from personal buy-to-let to corporate lets isn’t a fad. It’s a structural response to tax changes and tighter regulation that have made the old model unworkable for many landlords. If you’re a higher-rate taxpayer with a mortgaged portfolio, the numbers almost certainly favour a limited company structure. The next step is to speak to a property accountant and a solicitor who understand SPVs and corporate lets. If this was useful, you might also want to read Is buying off-plan property in the UK a risky move?
Sources and Further Reading
The future of UK urban living — How changing housing patterns affect landlords and investors.
How the Rent Reform Act Is Driving Landlords Toward Company Lets. TenantMarket, 2025.
Why Personal Buy-to-Let Is Becoming Less Viable. R&M Mortgage Solutions, 2025.
