The number of new property companies formed in the UK fell by more than a quarter in October, raising fresh concerns about investment in the private rented sector and the future supply of rental homes.
New figures from mortgage broker Cyborg Finance show that property company formations dropped 25.4% year-on-year, from 8,070 to 6,020.
That represents 2,050 fewer companies than in October 2025.
The figures point to a sharp reversal in activity. Property company formations increased by 1% during the first three months of 2026. However, they fell 22.8% in the third quarter.
Between January and October, the tracker recorded 63,926 new property companies. That compares with 74,617 during the same period last year.
The decline of 14.3% represents 10,691 fewer formations.
If the trend continues, 2026 could become the first year since the tracker began in 2016 to record an annual decline. That would end nine consecutive years of growth.
Property company formations fall sharply
| Period | 2025 | 2026 | Change |
|---|---|---|---|
| January–October | 74,617 | 63,926 | −14.3% |
| July–September | 22,864 | 17,648 | −22.8% |
| October | 8,070 | 6,020 | −25.4% |
The slowdown comes as landlords continue to assess the financial implications of property investment.
Limited company structures have become increasingly common among buy-to-let investors, particularly for tax planning and portfolio management.
However, the latest figures suggest fewer investors are establishing new corporate structures.
Mark Hosker, mortgage adviser at Cyborg Finance, said: “What’s interesting is how quickly the picture has changed. We started 2026 with more property companies being formed than the previous year, but by October we’re looking at just over a quarter fewer.
“That’s a significant change in the pace of new company formations, particularly when you consider how popular limited company structures have become among property investors.”
Could the slowdown threaten rental housing supply?
The figures also raise questions about the longer-term supply of much-needed private rented accommodation.
If fewer company formations reflect a wider retreat from buy-to-let investment, the slowdown could affect the availability of rental homes.
That would be a concern for letting agents and tenants, particularly in areas where rental demand already exceeds available supply.
Reduced investment could also limit opportunities for landlords to expand their portfolios, potentially adding pressure to rents where housing shortages persist.
However, the figures alone cannot establish whether landlords are reducing investment or whether the number of available rental properties is falling.
Fewer companies does not mean fewer landlords
Hosker cautioned against interpreting the figures as evidence of a landlord exodus.
He said: “A fall in company formations doesn’t necessarily mean landlords are leaving the market. An investor who already has a limited company can continue buying properties through it without setting up another business.
“But it does suggest fewer new property-company structures are being established. Whether that’s down to landlords reassessing their plans, the economics of new investments or simply a more mature market is something worth watching.”
Separate research by Hamptons also identified a slowdown. It reported an 8% annual fall in buy-to-let company incorporations between January and August 2026.
However, the two studies use different methodologies and cannot be directly compared.
Cyborg Finance analysed Companies House records using two property-related Standard Industrial Classification (SIC) codes.
These cover companies involved in buying and selling their own real estate, alongside those letting or operating owned or leased property.
The data does not establish whether each company owns residential rental property or represents a new landlord entering the market.
Existing companies can also acquire additional properties without creating new legal entities.
The tracker uses observed company records rather than a complete historical incorporation register. Its figures may change as Companies House updates its data.
The findings nevertheless indicate a substantial slowdown in new property company formations during 2026. Whether that translates into reduced investment and fewer rental homes remains to be seen.
