Why Buying a Buy-to-Let in Your Own Name Is (Nearly) Done For — And Why Limited Companies Are Taking Over

The UK buy-to-let market has changed more in the last decade than it did in the twenty before it. Once upon a time, landlords could buy a rental property in their personal name, claim generous tax relief, and watch the numbers stack up with very little friction.

But those days? Pretty much over.

Today, more and more landlords, from first-timers to seasoned portfolio owners, are choosing to buy through limited companies instead. And there’s a good reason for that. Actually, several.

Let’s break down why buying in your own name has become far less attractive, and why using a limited company has become the smarter, more sustainable route.

Why Buying in Your Personal Name No Longer Works Like It Used To

1. Mortgage Interest Tax Relief Was Slashed

This is the big one.

Before 2017, landlords could deduct 100% of their mortgage interest from their rental income before paying tax. That meant you were taxed only on your actual profit, the true income after the mortgage was paid.

Now? You get a flat tax.

So if you’re a higher-rate (40%) or additional-rate (45%) taxpayer, you’re paying tax on rental income you never really see, because it goes straight to the lender.

2. Section 24 Forces Tax Even When You’re Not Really Making a Profit

Under Section 24 rules, your mortgage interest isn't deducted from your rental income before tax is calculated.

Even if you're breaking even — or close to it — you could still owe tax.

That’s why so many landlords feel like they’re being taxed on thin air.

3. Personal Name Borrowing Can Limit How Big Your Portfolio Grows

Most lenders tighten affordability and stress tests much more harshly for landlords buying in their personal name.

Higher stress rates = lower borrowing amounts = slower portfolio growth.

If you’re trying to scale? This becomes a significant bottleneck.

4. Future Tax Liabilities Can Become a Problem

Passing on property to children or restructuring portfolios becomes much trickier and often more expensive when everything is held personally. It’s not very “future-proof.”

Why Limited Company Buy-to-Lets Are Booming

Now let’s talk about why so many landlords are switching to, or starting with, limited company structures.

1. Mortgage Interest Is Fully Tax-Deductible

Yes — the one thing landlords loved most is still available.

If you own your buy-to-let through a limited company, your mortgage interest counts as a legitimate business expense. That means the company is taxed only on its true profit.

This single factor often makes the numbers look dramatically better.

2. Corporation Tax Is Lower Than Personal Income Tax

Companies pay corporation tax, not income tax.

Even with the current 19–25% banding, this is typically far lower than the 40–45% many landlords pay personally.

So instead of watching a huge slice of rental income disappear, landlords keep far more of their profit inside the company.

3. More Lenders Now Offer Competitive Limited Company Rates

A few years ago, limited-company mortgages were niche and expensive. Not anymore.

Demand has exploded, lenders have expanded their offerings, and rates are now extremely competitive, often very close to personal-name pricing.

4. It’s Easier to Scale and Grow a Portfolio

Limited companies offer:

• More flexible stress tests

• Higher allowable borrowing

• Portfolio-friendly underwriting

  
  

This means you can keep expanding without hitting a wall as fast.

5. Better for Long-Term Planning and Passing Assets Down

A limited company structure gives you more control over:

• Directors’ shares

• Future succession planning

• Gifting shares to children gradually

• Reducing inheritance tax on the portfolio

  
  

With smart planning (and the right advice), you can grow something that benefits your family long-term — not just the taxman.

6. Clear Separation of Personal and Business Risk

Holding property within a company keeps liabilities ring-fenced. That separation brings financial and legal protection that you simply don’t get when everything sits under your personal name.

“But I’m Not a Business Owner…” Setting Up a Limited Company Is Easier Than You Think

This is one of the biggest misconceptions I hear from first-time landlords.3

People often imagine that owning property through a limited company means:

• You have to be self-employed

• You need an accountant on speed dial

• You need to understand business law

• It’s complicated, expensive or “too official”

  
  

It’s none of those things.

Setting up a limited company for buy-to-let purposes is incredibly simple — and thousands of everyday landlords do it every year.

Here’s what it actually looks like:

• You choose a company name

• You fill in a short online form

• You pay a small fee

• Companies House registers it the same day

  
  

Done. You now have a fully functioning company.

You don’t need staff. You don’t need a shop. You don’t need to be a “business mogul.”

A limited company for property investment is simply a wrapper — a tax-efficient structure used purely to hold property. Most people set one up in 10–15 minutes.

And because landlords typically only complete a few transactions each year, ongoing admin is minimal. An accountant can handle the annual filings, and many landlords run their company just like they would run a normal buy-to-let, just with better tax treatment and more flexibility.

So… Should Everyone Buy Through a Limited Company?

Not necessarily.

For example, if you're a basic-rate taxpayer buying one small property, a personal purchase might still be fine.

But for most landlords — especially anyone planning to grow, reinvest, or maximise tax efficiency, limited companies offer a far more strategic route. The maths almost always comes out stronger.

The Bottom Line

Buying buy-to-let properties in your personal name isn’t wrong, it’s just no longer the obvious choice it once was.

With Section 24, higher taxes, tighter affordability, and shrinking margins, most landlords find they simply get better outcomes through a limited company.

If you’re planning to invest or expand your portfolio, it’s worth exploring both routes, but the momentum, the advantages, and the tax efficiency are firmly leaning toward the limited company model.

If you want personalised advice or want to compare what the numbers look like for your situation, feel free to reach out, I’d be happy to run the figures with you.