The Intermediary – October 2026 - Flipbook - Page 37
BUY-TO-LET
Opinion
Only the beginning
of the landlord exit
A
wave of landlords
are selling, and we
are only seeing the
beginning. From
where I sit, buying
residential property
from landlords across the UK, I
am seeing a noticeable increase in
landlords deciding now is the time.
It is not one single issue driving
this. Instead, it is the combination of
higher borrowing costs, increasing
regulation and the prospect of further
investment being required in rental
properties over the coming years.
For many, the traditional buy-to-let
(BTL) model simply does not look as
aractive as it once did.
Interest rates
For landlords who have mortgages,
particularly those with relatively
high loan-to-value (LTV) borrowing,
financing costs remain considerably
higher than they were when many
properties were originally purchased.
A property that once produced a
comfortable monthly surplus can
look very different when mortgage
costs, insurance, maintenance,
management fees, compliance costs
and tax are all taken into account.
The problem is particularly
noticeable with lower-yielding
properties. If a landlord owns a
property worth £250,000 and it
produces £1,100 a month in rent,
there is only so much room for costs
to increase before the return starts to
look unaractive.
The regulation issue
The Renters’ Rights Act has now
fundamentally changed the private
rented sector (PRS) in England.
Since 1st May 2026, Section 21 ‘nofault’ evictions have been abolished,
most assured shorthold tenancies
(ASTs) have moved to a periodic
tenancy structure, and landlords
face new rules around rent increases,
rental bidding and other aspects of
the landlord-tenant relationship. The
intention is to give tenants greater
security and protection. But from a
landlord’s perspective, it changes the
risk profile of owning rental property.
Some landlords are comfortable
with these changes. Others are looking
at the increased responsibilities,
compliance requirements and
potential costs, and simply deciding
that they would rather release their
capital and move on.
Energy efficiency
The Government has plans for
privately rented homes to meet a
higher energy efficiency standard by
2030. The current policy response
includes a £10,000 cost cap for
improvements, subject to the detailed
rules and exemptions.
For a modern property that already
has a good Energy Performance
Certificate (EPC) rating, this may
not be a major concern. For an older
property with an E or below, the
potential cost of geing compliant
could be significant.
This is where we could see a
particularly interesting shi in
the market. Some landlords are
asking themselves whether they
want to spend thousands of pounds
upgrading an ageing property, while
simultaneously dealing with higher
financing costs and a more heavily
regulated rental market.
For an investor with a strong yield, a
low mortgage balance and a long-term
strategy, the answer may well be yes.
For someone who has owned one or
two properties for years and is relying
on the rental income as an additional
source of income, the calculation can
be very different.
The result
We are increasingly seeing landlords
choosing to sell rather than invest
further. This doesn’t necessarily mean
a mass exodus from buy-to-let. There
are still millions of rental properties
JASON HARRIS-COHEN
is managing director
at LandlordBuyer
in the UK, and many professional
landlords who remain commied to
the sector.
What we are seeing is a gradual
change in the type of landlord
who wants to remain. The highly
leveraged, low-yielding property with
significant future refurbishment
requirements is becoming
increasingly difficult to justify.
Conversely, properties with strong
rental yields, manageable borrowing
and good long-term fundamentals can
still make a lot of sense.
For us, this creates an interesting
opportunity. We are seeing landlords
who have owned properties for
many years becoming increasingly
open to conversations about selling,
particularly where they have a
combination of mortgage pressure,
upcoming expenditure and concerns
about future regulation.
Oen, these are not distressed
sellers in the traditional sense. They
simply look at the numbers and
decide that selling now is preferable to
puing more money into the property.
That distinction is important.
The next few years could see a
significant transfer of residential
property from smaller, individual
landlords to investors who are
prepared to take a longer-term view
and invest in improving properties.
The sector is changing. Higher
borrowing costs have changed the
economics. The Renters’ Rights
Act has changed the regulatory
environment. And the proposed
2030 energy efficiency requirements
are creating another future cost for
landlords to consider.
Put all three together and it is easy
to understand why I am seeing more
landlords asking the same question: Is
it still worth it? ●
October 2026 | The Intermediary
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