Buying Through a Limited Company in 2026: Is It Still Worth It?

Why Limited Company Buy-to-Let Became Popular

The surge in limited company structures began after the phased removal of full mortgage interest relief for individual landlords under Section 24.

Under the current system:

• Individual landlords pay income tax on rental profit before mortgage interest is deducted.
• They receive only a 20% tax credit on mortgage interest.
• Higher-rate taxpayers are therefore disproportionately affected.

By contrast, limited companies can deduct mortgage interest as a full business expense before calculating profit.

This structural difference remains the primary driver behind incorporation decisions in 2026.

Corporation Tax in 2026: The Real Position

Corporation tax now sits at:

• 19% for profits up to £50,000.
• Up to 25% for profits above £250,000.
• Marginal relief applied between those thresholds.

For many small-to-medium portfolio landlords, the effective rate remains significantly lower than 40% or 45% personal income tax.

However, tax efficiency depends heavily on whether profits are retained or extracted.

Retained vs Extracted Profits

• Retained profits allow tax deferral and compound growth.
• Dividends are subject to personal dividend tax rates.
• Salary extraction creates additional income tax and National Insurance liabilities.

Investors planning to reinvest rental profits often see stronger advantages than those seeking immediate income.

Mortgage Rates for Limited Company Buy-to-Let in 2026

Historically, limited company mortgages carried premiums of 1% or more above personal buy-to-let products.

In 2026, that gap has narrowed considerably.

• Typical personal BTL rates: 4.2% – 5.0%
• Typical limited company BTL rates: 4.6% – 5.4%
• Five-year fixes remain dominant
• Most lenders require 25% deposits

While slightly higher, the rate differential is often outweighed by tax efficiencies in higher tax brackets.

North West Yields: Why This Region Changes the Equation

Yield is the variable that makes limited company purchases particularly attractive in the North West.

Lower capital values combined with resilient rental demand create stronger gross returns than many southern markets.

Preston

Preston continues to benefit from university demand, employment growth and regeneration.

• Strong student and professional tenant base
• Consistent demand for two- and three-bedroom houses
• Competitive entry pricing compared to national averages

Explore current investment opportunities via the Preston branch: Preston Estate Agents

Lancaster

Lancaster offers stability driven by higher education, healthcare employment and commuter appeal.

• Reliable tenancy turnover cycle
• Family homes performing well in suburban areas
• Balanced rental yields with moderate capital growth

See local market insight from: Lancaster Estate Agents

Blackpool

Blackpool presents higher headline yields but requires selective purchasing.

• Stronger gross yields than many UK regions
• Greater variation in tenant profile
• Important to assess micro-location carefully

Explore Blackpool opportunities: Blackpool Estate Agents

Morecambe

Morecambe's ongoing regeneration and Eden Project North momentum continues to support investor interest.

• Coastal regeneration narrative
• Affordable entry prices
• Growing lifestyle and commuter appeal

View property options here: Morecambe Estate Agents

Stamp Duty Considerations

Limited companies pay the 3% additional dwelling surcharge.

There is no first-time buyer relief within a company structure.

However, most portfolio landlords purchasing via SPV would pay the surcharge regardless of structure.

Accounting and Administrative Costs

Limited companies require:

• Annual accounts submission to Companies House
• Corporation tax filing
• Director confirmation statements
• Separate company bank accounts

Professional accounting costs must be factored into yield calculations.

Is It Still Worth It in 2026?

The answer depends on three primary variables:

• Your personal income tax band
• Your intention to reinvest profits
• Your target yield and region

In higher-yield North West markets, limited company purchasing can significantly improve long-term capital compounding potential.

For single-property lifestyle landlords with low leverage, the benefits may be marginal.

Who Should Strongly Consider a Limited Company Structure?

• Higher-rate taxpayers (40%+)
• Portfolio investors scaling beyond one or two properties
• Landlords targeting 6%+ gross yields
• Investors planning generational wealth transfer

Who May Be Better Remaining Personal?

• Basic-rate taxpayers with low borrowing
• Landlords seeking immediate rental income extraction
• Single-property owners with no expansion plans

Professional Advice Is Critical

Incorporation decisions carry tax, legal and refinancing implications.

Consult a qualified tax adviser before restructuring or purchasing.

The North West Advantage in 2026

In lower-yield southern markets, limited company advantages can be marginal once mortgage premiums and compliance costs are considered.

In higher-yield regions such as Preston, Lancaster, Blackpool and Morecambe, the structure often enhances scalability and long-term tax efficiency.

Choosing the right structure is less about national headlines and more about matching tax position with regional performance.

About the Author

Laura Gittins is the PR & Marketing Manager at Farrell Heyworth, specialising in market commentary, regional housing insights and consumer guidance. Laura works closely with internal teams and industry partners to deliver trusted updates on the North West property market. Connect with her on LinkedIn.