Still in the game…

Buy-to-Let has long been a popular route to wealth creation. But in recent years, regulatory and other reforms have sparked debate over its viability.

Quite simply, the mix of tax and legislative changes, combined with higher costs, have dented the profitability of buy-to-let. Yet the sector remains key to the provision of housing in the UK, providing homes for millions of renters.

And whilst some landlords have taken their profit, and left the marketplace, there’s not been a mass sell-off. Interestingly, over the past 10 years of ownership, the typical landlord who sold a rental home in 2024 saw the value rise by an average of £102,800, or 53% more than the price they originally paid.

For those remaining, landlords have adapted in numerous ways, such as setting up Limited Companies, and are monitoring (or already responding to) developments such as the Renters’ Rights Bill, and future EPC targets.

And, the rental take is still sizeable

A positive for landlords – due to some leaving the marketplace – is that this fuels (or maintains) demand for the remaining properties.

Across the UK, the average monthly rent is £1,288 (up 1.2% annually). The highest return was Greater London at £2,059, with the rest of the UK averaging out at £1,107.

Limited Company status

A reflection of the adaptability of landlords is the sizeable growth in those opting for Limited Company status, with around 400,000 companies now in play, with a record number set up in 2024 (over 60,000 new firms).

Hamptons estimate that about 70-75% of all new buy-to-let purchases go into a company structure.

The higher-rate taxpayers have been particularly motivated by it, as the regulatory rules limit the mortgage finance that you could offset against your individual income. The Limited Company route may help mitigate those tax changes.

However, it won’t be the most suitable option for all, so do speak to your accountant and solicitor regarding tax issues, and property structures.

We’re here to help…

The higher mortgage rates in recent times would have dented profitability, but buy-to-let loan deals are becoming cheaper.
For example, the average buy-to-let rate on a 2-year fix stands at 5.04%. Back in July 2023, the average rate hit a recent high of 6.97%.

So, if you’re coming off a fixed rate deal, or simply want to have a chat about future financing options, then please do get in touch.

Whatever your situation, we’d fully assess the suitability of the options on offer. And you can take comfort from the fact that we operate in this sector day-in day-out, plus have the qualifications and expertise to deliver advice that meets your needs.

Your property may be repossessed if you do not keep up repayments on your mortgage.

(Source: Hamptons, Spring 2025)
(Source: Homelet Rental Index report, March 2025)
(Source: Hamptons report, January 2025)
(Source: moneyfactscompare.co.uk, May 2025)