The intuitive story is that landlords rush into companies when the market turns: prices fall, yields tighten, so people restructure. We tested that against our own numbers and it is not true. Across the 118 months from September 2016 to June 2026, the correlation between the year-on-year change in UK property company incorporations and the year-on-year change in the UK House Price Index is 0.008. That is not a weak relationship. That is no relationship.
The finding matters because it removes a variable from the decision. If you are waiting for the market to tell you when to incorporate, the market has never told anyone. What the series does track, at least in timing, is tax events. That is a more useful thing to watch, and it is watchable in advance.
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The method, in one paragraph
Both series are public and both are monthly. The incorporation series is our own: a direct count of companies incorporated at Companies House under the four real-estate SIC codes (68100, 68201, 68209, 68320), taken as a deduplicated union so a company holding two of those codes is counted once. Full definitions, the dedup rule and the known weaknesses are in the UK SPV Incorporation Index and its published methodology. The price series is the UK House Price Index from HM Land Registry and ONS, United Kingdom average price. We converted both to year-on-year percentage changes, which strips out the shared upward trend and the seasonality that would otherwise manufacture a correlation, aligned them by calendar month, and computed a Pearson correlation across every overlapping month from September 2016 to June 2026. June 2026 is the last settled month in our data; the two most recent months are provisional because of Companies House indexing lag and are excluded. Anyone with a Companies House API key can rebuild the whole thing.
The headline result: r = 0.008 across 118 monthly observations. Stripping out the pandemic distortion of March 2020 to June 2021, when both series behaved abnormally for reasons that had nothing to do with landlord structuring, gives minus 0.19 over the remaining 102 months. Still weak, and pointing the opposite way from the intuitive story rather than supporting it. We also tested lags of one to twelve months, on the theory that incorporations might respond to prices with a delay. The strongest reading was minus 0.29 at a nine-month lag, which is not a signal anyone should trade on.
The one real test: the 2023 price fall
A correlation across a decade can hide the case that matters. The window that actually tests the question is the only sustained fall in UK house prices in our data, from July 2023 to April 2024, when the index was negative year-on-year every month and bottomed at minus 2.7 per cent in December 2023.
Incorporations did not fall with it. They accelerated.
| Month | Union incorporations, year-on-year change | UK house price index, year-on-year change |
|---|---|---|
| 2023-07 | -1.2% | -0.7% |
| 2023-09 | +2.5% | -1.7% |
| 2023-10 | +25.3% | -2.1% |
| 2023-12 | +27.0% | -2.7% |
| 2024-02 | +26.8% | -1.6% |
| 2024-04 | +51.0% | -0.04% |
If falling prices deterred landlords from incorporating, this is the window in which it would have shown. Instead the incorporation series recorded some of its strongest growth of the decade while the price index was in its only negative stretch. We are not claiming the fall caused the rise. We are claiming the two are not moving together in the direction the common story assumes, and this window is the cleanest evidence of that available.
Year by year: the two series side by side
The annual view makes the independence easier to see. Incorporations are our union count for the calendar year. The price column is the December-on-December change in the UK House Price Index.
| Year | Union incorporations | Change on prior year | UK house prices, Dec on Dec | Note |
|---|---|---|---|---|
| 2016 | 33,040 | - | +5.2% | Base year of our annual series |
| 2017 | 43,422 | +31.4% | +4.6% | Largest annual jump in the series, at the start of the Section 24 phase-in |
| 2018 | 46,465 | +7.0% | +2.0% | Growth slows sharply while prices also cool |
| 2019 | 54,638 | +17.6% | +0.9% | Incorporations re-accelerate into the weakest price year of the decade |
| 2020 | 66,575 | +21.8% | +7.0% | Pandemic year, both series distorted |
| 2021 | 70,926 | +6.5% | +7.3% | Section 24 phase-in complete; incorporation growth slows as prices run hot |
| 2022 | 72,279 | +1.9% | +7.3% | Weakest growth in the series, on identical price growth to 2021 |
| 2023 | 74,639 | +3.3% | -2.7% | Prices fall; incorporations still grow |
| 2024 | 89,857 | +20.4% | +3.1% | Second largest jump in the series, prices only modestly recovering |
| 2025 | 95,140 | +5.9% | +1.9% | Record year in absolute terms; the peak month is September 2025 |
Read down the two change columns. 2022 and 2021 had the same price growth of 7.3 per cent and incorporation growth of 1.9 and 6.5 per cent. 2019 and 2024 had price growth of 0.9 and 3.1 per cent and incorporation growth of 17.6 and 20.4 per cent. The pairs do not sort. That is what a correlation of 0.008 looks like when you lay it out by hand.
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Where 2026 sits
The leading number is still ours. The last settled month is June 2026, at 4,840 incorporations under the headline 68209 code, down 20.1 per cent on June 2025. Across the union of four codes, the first half of 2026 recorded 44,076 incorporations against 48,826 in the first half of 2025, a fall of 9.7 per cent. Rolling twelve months to June 2026 stands at 66,312 on the headline code and 90,390 across all four.
House prices over the same period were up 2.0 per cent year-on-year in June 2026, to a UK average of £272,188. So: prices modestly positive, incorporations down by a tenth. Once again the two are not telling the same story, and once again the price line is context rather than cause. The honest reading of 2026 so far is that the flow is coming off a record peak rather than reversing, and that the peak itself, September 2025, sits nowhere near a turning point in the price series.
So what does move the number?
Timing, in our series, clusters around tax events. The largest annual jump in the whole decade is 2017, at the start of the Section 24 phase-in that ran across the tax years 2017/18 to 2020/21; the pillar on Section 24 and finance cost relief covers what that regime does, and this piece deliberately does not restate it. Growth then slows through 2021 and 2022 as the phase-in completes. The second largest jump is 2024, running into the record 2025, ahead of the April 2027 rise in property income tax rates. The change to Section 162 incorporation relief from April 2026, which made it a mandatory positive claim rather than an automatic one, is the same kind of event: a dated change that gives landlords a reason to act inside a particular window.
We are describing where the turning points sit, not proving that any one measure caused any one move. Several things move at once in a tax year and a monthly count cannot separate them. But the pattern is consistent in a way the price comparison simply is not, and it points at the practical conclusion: the trigger for looking at a company structure is a change in how your rental income will be taxed, and those changes are announced in advance. Our page on when to incorporate a property portfolio works through what to do with that lead time, and the 2027 tax rates and the incorporation decision handles the specific event now in front of most landlords.
Where prices genuinely do enter the decision is narrower than people assume, and it is mechanical. Moving an existing property into a company is a disposal at market value for capital gains purposes and an acquisition at market value for stamp duty. A higher index therefore raises the cost of transferring in, which is a question about how and when a transfer is executed rather than about whether a company is the right structure. The incorporation cost calculator guide sets out how those two bills are built, and the SPV company hub covers the structure itself.
What we would not claim
The caveats, stated plainly. Our incorporation counts are gross, so companies later dissolved stay in the count and the series measures formation rather than surviving stock. The UK House Price Index is a national average across regions whose paths differ materially, so an individual landlord's experienced price move may not be the one in the table. And a near-zero correlation is evidence that the aggregates do not move together; it is not evidence about any individual landlord's reasoning, which no monthly count can see.
What it does support is this: if you have been waiting for house prices to give you a signal on incorporation, that signal has never existed in ten years of data. The dates that matter are in the tax calendar.