Brokers report that smaller landlords are selling up in the tens of thousands, a trend that is supported by increased capital gains tax revenues from real estate
Does the amateur landlord era have an end?
According to a survey, almost 100,000 landlords are expected to leave the buy-to-let rental market before the year ends, and other data indicates that small landlords are already leaving.
According to data from a survey of 43 brokers used by landlords conducted by lender Black and White Bridging, up to 93,000 buy-to-let (BTL) landlords, or 6% of those with a BTL mortgage, are anticipated to sell up this year.
There were 2.84 million unincorporated buy-to-let landlords in the UK in 2023, according to HMRC data. Based on information from the English Private Landlord Survey 2021, Black & White Bridging calculated that 57% of these 1.2 million landlords held a buy-to-let mortgage.
According to Black & White's research, the number of buy-to-let landlords with mortgages has already decreased by 65,000 between 2023 and 2024, and there will likely be an additional 100,000 drop by the end of the year.
"This survey not only shows that over 150,000 landlords have left the rental market over a two-year period, but it also shows that the rate of change is increasing year over year," stated Damien Druce, chief operating officer at Black & White Bridging.
These are probably landlords who own one or two properties in their small portfolios and who don't want to deal with the constant changes in regulations and growing expenses.
In addition, new information that the accounting firm RSM UK received from HMRC through a Freedom of Information (FOI) request indicated that smaller landlords were already exiting the market.
It revealed that, in comparison to seven years prior, the number of taxpayers paying capital gains tax (CGT) on residential property and carried interest more than doubled in the 2023 - 2024 tax year. Since capital gains tax does not apply to primary residences, it is a reliable indicator that landlords are the ones selling and paying the tax.
The associated increase in tax revenues for the Treasury could ultimately turn out to be temporary if it is a sign of smaller landlords pulling out of the market, according to Chris Etherington, private client partner at RSM.
Small landlords who sell their properties.
In the past ten or so years, tax and other legislative changes have significantly changed the landscape for UK landlords.
The gradual elimination of mortgage interest tax relief for unincorporated landlords, which reduced their tax credit to 20% of their mortgage interest payments, is one of the largest tax changes.
The same is true of the 3 percent stamp duty land tax (SDLT) surcharge that was first applied to second homes and subsequently raised to 5 percent. Currently, there is an equivalent surcharge of 8% on properties bought in Scotland that are subject to land and buildings transaction tax (LBTT).
The limitation on mortgage interest tax relief is unlikely to have had an effect on landlords with larger portfolios, many of whom operate through a company rather than directly.
In a similar vein, some larger landlords might not be subject to the same stamp duty rates as smaller landlords because purchases of six or more residential properties are considered non-residential transactions, exempting them from the surcharge and higher stamp duty rates.
A less stable real estate market, increased interest rates, and broader changes like the Renters Reform Bill, which eliminated no-fault evictions, have all added to the unpredictability facing landlords.
Etherington said: "Data indicates that more small and inadvertent landlords may be selling up, and we now seem to be witnessing the effects of all these changes as the established foundations of the real estate market are being shaken up."
"Many small or inadvertent landlords might be hesitant to reconsider their long-term plans as a result of another budget that seems to have large tax increases on the agenda," he continued.
Changes to landlords' budgets.
According to the Times, the government is thinking of using the budget to declare that, in addition to income tax, landlords will now have to pay National Insurance (NI) on rental income profits in an effort to raise £2 billion.
According to Shaun Moore, a tax and financial planning specialist at Quilter, the proposal would deal the buy-to-let industry yet another serious setback. "Adding more taxes could hasten the departure of landlords from the market, further decreasing the supply of rental properties at a time when demand is still high," he stated.
Tenant affordability will deteriorate and the housing crisis will worsen as a result of this imbalance, which will unavoidably drive rents even higher. The problem would also likely be made worse by renters paying higher rents as a result of the addition of NI, Moore continued.
As landlords search for ways to lessen the impact of the changes, which are expected to reduce any projected revenue boost for the government, the increasingly common practice of holding properties within a limited company structure is likely to soar.
Moore proposed that reviewing the modifications to mortgage interest relief might be a better course of action.
In order to ensure that the Treasury raises revenue without destabilizing the rental market, he said, "a fairer system would be created and the incentive for landlords to incorporate would be reduced if they were allowed to deduct mortgage interest before calculating taxable income, then apply income tax and even NI if necessary."
BTL rate reductions lose their shine due to pressure on landlords.
Fortunately for landlords, Moneyfacts reports that choice has increased to a record high and buy-to-let fixed rates have dropped to their lowest levels since September 2022. The mean fixed rates for two and five years are 4 and 88 percent, respectively.
Overall, there were 4,597 buy-to-let deals (both fixed and variable), which is the most since November 2011. Both two- and five-year fixed options have record volumes of deals at 80 percent and 75 percent loan-to-values (LTVs), although five-year fixed deals still outnumber two-year fixed deals.
"The fact that buy-to-let rates have dropped to their lowest levels since September 2022, both for a two- or five-year fixed term, may encourage landlords looking to refinance or enter the market," said Rachel Springall, finance expert at Moneyfactscompare . co . uk.
"The average two-year fixed rate has decreased from 6.64 percent to 4.88 percent, and it has been marginally less than 5 percent since the beginning of June 2025 (4.98 percent) for landlords who locked into a fixed rate agreement in 2023 and are scheduled to refinance.
A five-year fixed deal, however, would have been preferred by some landlords for peace of mind due to interest rate uncertainty and changes to mortgage interest tax relief in April 2020. In September 2020, the average five-year fixed rate was 3 percent. Today, it is 5 percent.
Since tax changes over the years have made it harder for investors to achieve desired profit margins, financing costs are a fundamental aspect of becoming a landlord. More worries will arise as a result of rumors that the next budget will include additional changes that would affect private landlords, according to Springall.
The number of buy-to-let mortgage repossessions has increased by 11% annually, according to recent data from UK Finance. A National Residential Landlords Association (NRLA) survey found that only 8% of landlords purchased properties in 2024, while a record 26% of landlords sold at least one property.
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