Amateur landlords are rethinking their next move as legislation and costs reshape the UK's buy-to-let market
The buy-to-let market is undergoing a structural shift, driven by a combination of rising costs, tightening regulation, and the sweeping changes introduced by the Renters' Rights Act.
For Bob Singh (pictured top), founder and director of Chess Mortgages in London, the divide between amateur and professional landlords has rarely been more pronounced.
"With the Renters' Rights Act, people are thinking twice now before they enter the buy-to-let market," Singh told Mortgage Introducer. "Those that are already in there have no choice but to remain there or sell, and then selling comes with a big capital gains tax bill in many cases."
For smaller investors – those Singh describes as "amateur landlords" – the appetite to expand is diminishing. But the picture looks different for those with larger portfolios.
"Anybody who's already big, has got 10, 15 properties, I think they'll probably start to incorporate, which they should do, and then keep on buying more because they're a bit more experienced and they're a bit more full-time."
The shift towards limited company ownership is well documented. Research from property technology firm Propoly, published in March, forecast a 7.6% rise in buy-to-let company formations during 2026, with an estimated 401,744 such companies operational in 2025 – a 13.7% annual increase. The message for landlords considering that route is to seek specialist tax advice before incorporating a property portfolio into a limited company, as the right structure depends entirely on individual circumstances.
Looking beyond vanilla buy-to-let
With straightforward residential lets under pressure, particularly in the south of England, where yields can be thin, Singh says landlords are increasingly exploring alternatives. Houses in multiple occupation, holiday lets, and social housing arrangements are drawing growing interest from investors seeking stronger returns.
"The amateur may either no longer enter the market or consider other types of buy-to-let," he said. "People will be looking for high yield. And then obviously the new kid on the block is social housing – from the five-year leases to the likes of Serco – and they pay very good rents."
That search for yield is already reshaping the sector. Licence applications for houses in multiple occupation rose by 40% between 2018 and 2024, according to data gathered by landlord insurance provider Just Landlords through Freedom of Information requests to local councils, with the sharpest growth recorded in the Midlands and the north.
Singh sees that shift clearly in his own practice. "Many people are moving up north, buying in the Midlands and North East, North West," he said, but he acknowledged the appetite for that transition is far from universal.
The arithmetic of vanilla buy-to-let in the south of England is a particular concern. Singh pointed out that many landlords underestimate the true cost of their investment by overlooking the expense of capital raised against their own home.
"They raise money on their own house to act as a deposit, which basically is 100% funding," he said. "So when you take into account the increase in cost on your own mortgage and the buy-to-let mortgage, you're probably not making that much money."
What does this mean for brokers and advisers?
Singh is direct about what the current market demands from every landlord – professional tax advice before any purchase, without exception.
"Anybody who buys a buy-to-let clearly needs to take tax advice," he said. "Because it may not be viable at all, it may not achieve their objectives. There's no point in buying a buy-to-let if it's not going to achieve your goals."
That advice extends to the structural question of whether to purchase in a personal name or through a limited company – a decision Singh says is too often made without adequate understanding.
"Many people don't understand the reasons why people would still buy in personal versus limited company. They'll just say XYZ has just done that, so I'll do the same."
He is particularly pointed about advisers who fall short of that standard. "I think many advisers aren't really clued up. Generally, we can't advise on tax anyway, but you can talk about it and make sure they do get professional advice, and I think this is where some advisers may not be doing that. They might just be taking orders as opposed to being advisers."
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