But others look to expand or diversify portfolios
A notable proportion of landlords are preparing to scale back or exit the UK’s buy-to-let market due to rising taxes and tightening regulation, according to a new report from specialist lender Together.
The findings suggest that 12% of BTL landlords are expected to sell some of their properties in 2025, with 11% intending to leave the sector entirely. Another 8% said they see no investment opportunities on the horizon and will pause any new activity in the year ahead.
These decisions come despite a strong performance for the buy-to-let sector in 2024. Data from UK Finance showed a 39% increase in BTL mortgage approvals in the fourth quarter compared to the same period in 2023, with total lending value rising by 47%.
Key drivers behind the retreat include tax burdens and regulatory changes. Fourteen percent of landlords pointed to Capital Gains Tax as the main factor behind their decision to sell. Meanwhile, 12% cited higher interest rates, and 8% said the government’s Renters Rights Bill was the primary reason for leaving the market.
While some landlords are opting to step back, others remain optimistic. Nearly a third (29%) of those surveyed said they plan to expand or diversify their portfolios. Together’s research suggests that the market is increasingly favouring larger, well-capitalised landlords who are better equipped to navigate rising costs.
Persistent challenges remain for those staying in the sector. Seventeen percent of landlords cited rising construction costs as a major concern, while 16% flagged growing competition from international investors and potential policy shifts under the Labour government. Stamp duty changes and new safety requirements were each noted as significant hurdles by 15% of respondents.
“BTL is a robust market and while the impact of cost pressures and wider regulatory changes is apparent, we are still seeing a healthy proportion of landlords riding out the wave and expanding their portfolios,” said Ryan Etchells (pictured), chief commercial officer at Together. “There will likely be some smaller or amateur landlords who decide to sell off investments or exit completely, but in their position we are already seeing larger, professional landlords stepping in to seize diversified opportunities.
“Until the final outcome of the Renters Reform Bill is known, there may be a bit more volatility as landlords assess the cost impact to them and their property plans this year. But on the whole, it’s a changing of the guard rather than a mass exodus. A combination of more flexible BTL regulations and an agile lending sector can help landlords to manage their portfolios and ensure they are able to leverage all available opportunities – something the specialist sector is in a prime position to do.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
