Landlords are thinking more like portfolio managers than passive investors
After years of buoyant growth, the UK’s buy-to-let (BTL) market is facing a new era of complexity. Rising costs, tighter regulations and shifting tenant demands are forcing landlords to think more like portfolio managers than passive investors. Despite the turbulence, brokers say there are still plenty of opportunities, but success increasingly relies on structure, strategy, and adaptability.
David Hollingworth, associate director at L&C Mortgages, notes that while some investors are withdrawing, seasoned landlords are continuing to buy strategically. “There’s still activity from experienced landlords who know how to make the numbers work,” he said. “Often it’s about longer-term planning, using limited company structures and reviewing yields carefully.”
This pattern has been observed by brokers across the sector, such as Andrew Quinn, managing director at Response Mortgage Services “There are fewer accidental landlords and more who are coming in with a clear long-term strategy, often buying through new limited companies. These aren’t one-off purchases, they’re building portfolios.”
Many landlords now opt to buy through limited company structures, especially those in higher tax brackets. According to Quinn, over 80% of his new BTL applications are made via limited companies. “The tax efficiency is the main driver,” he said. “But it’s not just about tax it’s about planning, liability and inheritance too.”
Will Rhind, VP of advice and growth at Habito, notes that this shift has become firmly established. “Mortgage interest tax relief still applies in full through a limited company, and it’s a more sustainable structure for landlords with long-term ambitions.”
However, Rhind cautions that limited company lending isn’t always cost-effective. “There’s more admin, higher arrangement fees, and landlords must understand the CGT implications if moving existing properties into a company,” he said. Limited company mortgage rates can also be higher than those for individual borrowers, making it important for landlords to weigh the long-term benefits against the upfront costs.
A key hurdle remains in the form of affordability. Higher stress rates and stricter rental cover tests have prompted landlords to restructure portfolios or switch strategies. “Some are offloading low-yield properties, others are focusing on HMOs, or student lets where the rental income can offset costs more easily,” says Rhind. “There’s also a growing interest in holiday lets and even small care homes on long leases.”
In response to tighter affordability criteria, many landlords are opting for five-year fixed deals, which offer more favourable stress rates than shorter terms. Others are choosing to stick with their current lenders to avoid the extra expense of switching, particularly when the properties are owned through limited companies. “The costs of switching can be prohibitive,” said Quinn. “Unless there’s a meaningful rate of improvement, many are opting for product transfers rather than remortgaging externally.”
How energy efficiency regulations play a part
Even with delays and changes to the regulations, energy efficiency regulations continue to influence decision-making. Some landlords are remortgaging to raise capital for property upgrades, while others are holding back from purchases due to uncertainty around future EPC requirements. “In areas like Leeds, many non-standard properties struggle to hit an E rating, let alone a C,” said Quinn. “Landlords don’t always know what’s coming, or how lenders will respond.”
Lenders are beginning to adapt with some introducing ‘green’ BTL products which offer preferential rates for energy-efficient homes, however Rhind notes that the range of these products is too limited.
So, what does a sustainable BTL strategy look like in 2025? According to these experts, it’s about professionalism, diversification, and long-term thinking. High-yield properties such as HMOs, multi-unit blocks, and student accommodation are in demand. Landlords are more focused on tenant profiles, energy ratings, and market resilience.
“There’s still strong demand for rental property, and that won’t change any time soon,” Hollingworth said. “Landlords who can adapt to regulation, manage their finances smartly, and think strategically will continue to do well.”
Rhind agrees: “Buy-to-let isn’t a sideline anymore, it’s evolving into a more professional, yield-driven space. The days of casual investing are fading, but those prepared to adapt will find plenty of opportunity.”
As the sector evolves, one thing is clear: success in BTL isn’t about timing the market, it’s about building a resilient, future-proofed strategy.
