We estimate that around half of all new landlord purchases last year used a company to hold their buy-to-let. 40% of these new purchases went into a company that was less than a year old.
The bulk of new buy-to-let companies set up in 2021 were in London and the South East, with the two regions together accounting for 45% of all new incorporations.
These two regions have long led the incorporation charge given higher rents mean the tax advantages from incorporation are generally larger. Only the North East (-6%) saw fewer buy-to-let companies set up in 2021 than in 2020.
While the number of buy-to-let incorporations has continued to grow, around 15,200 companies closed their doors in 2021 which equates to around 6% of all buy-to-let companies up and running today. The average company closed after 5.8 years, a figure which has fallen steadily in recent years as the number of incorporations has increased.
Despite rental growth across Great Britain peaking over the summer months, an annual growth figure of 7.2% recorded in December 2021 means 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: London before our records began in 2012, the South East in July 2016, East of England in December 2020 and the South West in December 2021.
Rental growth continued to strengthen in Greater London on the back of a recovery in Inner London. Inner London rents rose 8.6% over the last 12 months, the fastest rate since March 2016. This leaves the average rent here just 2.0% below where it was on the eve of the pandemic in January 2020.
Rental growth (3.7%) in Outer London has remained considerably more stable, returning to its pre-pandemic trajectory.