A quick refresher
Introduced in April 2017 and fully phased in by April 2020, Section 24 (properly: the Finance (No. 2) Act 2015) removed the ability of personal-name landlords to deduct mortgage interest as an expense. Instead, they now receive a 20% tax credit on the interest.
The practical effect: higher-rate (40%) and additional-rate (45%) taxpayers with leveraged BTL portfolios pay materially more tax. Basic-rate (20%) taxpayers are unaffected.
What the data shows
HMRC statistics through 2024 and Land Registry data through 2025 paint a clearer picture than the early commentary suggested:
1. Landlord numbers are down, but not as much as expected. There were approximately 2.82 million UK landlords at the peak in 2017. By end of 2024 this had fallen to around 2.57 million — a 9% decline over seven years. Notably, this is less than half the rate of decline the Treasury modelled.
2. Portfolio consolidation has accelerated. The number of landlords holding 1-2 properties has declined 14%, while landlords holding 4+ properties has grown 11%. Small accidental landlords are leaving; portfolio investors are consolidating.
3. Limited-company ownership has doubled. In 2017, ~15% of new BTL mortgages were in limited-company names. In 2025 this figure is 72% (Hamptons Q3 2025). The Section 24 structure-shift is real — it just took five years.
4. Rents have risen faster than inflation since 2020. UK rents are up 32% since Section 24 fully bedded in, well ahead of CPI (+23% over the same period). The broad view is that tax costs are being partially passed through to tenants via higher rents.
What this means if you are buying in 2026
If you are a basic-rate taxpayer (under ~£50k income): Personal-name ownership is usually still simpler and broadly tax-equivalent. The Ltd overhead may not be worth it for 1-2 properties.
If you are higher-rate or additional-rate: Almost universally better off in a limited company from the first property. Break-even is typically 2-3 years.
If you already own in personal name and regret it: Incorporation of an existing portfolio is legally and tax-complex. Incorporation Relief (TCGA 1992 s162) can defer CGT on transfer in, but SDLT is usually triggered. The Ramsay case and subsequent guidance mean this needs a specialist accountant.
The overlooked angle
Section 24 cost higher-rate landlords money, yes. But it also became a competitive moat: basic-rate landlords and limited companies (both Section-24-immune) have been consolidating share from exiting higher-rate personal-name landlords. If you are in the latter category structurally, or sitting on a Ltd, the last five years have been quietly accretive.
The bottom line
Section 24 did not break the BTL market. It reshaped it. The landlords who adapted — by incorporating, by raising rents, by consolidating portfolios — have done fine. The ones who did not adapt have sold.
For 2026 buyers, the takeaway is simple: if you are higher-rate, go limited-company from the first property. We model both routes for every client before they commit.
