A shift in the UK rental market might have seen some landlords exit the sector, but for the property investors who stay on, smart portfolios can lead to stronger returns.
Depending which research you look at, there is evidence that some landlords are being put off the rental sector by factors including higher taxes, pricier borrowing and running costs, and impending regulatory changes.
One report from TwentyCi in March found that the number of homes listed for sale that had previously been rental homes had increased by almost 50% year-on-year, while separate Ipsos research revealed that 24% might sell some of their properties over the next 12 months.
However, on the other side of the coin, a survey from Lendlord recently found that 41% of property investors said they were “somewhat confident” in the UK property market, while 70% of those surveyed said they actually planned to acquire more properties over the next 12 months, indicating a strong desire to act on current market conditions.
Separate research on buy-to-let lending found a huge 46.8% increase in property investors taking out new loans in the first quarter of this year compared with Q1 2024.
Landlords leaving: what’s the truth?
These contrasting studies paint a confused picture for the market and property investors’ views and actions, but overall it seems that strategic investment remains a strong pathway for many landlords – and could actually lead to an improved UK rental sector.
That’s the view of Jamie Williams of specialist property brokers, Pure Property Finance, who believes that while “hobbyist” property investors – which could be those who became “accidental landlords” or those who maybe own one investment property on the side of their main income stream – are being replaced by more serious landlords.
While small-time property investors may be more vulnerable to things like interest rate and tax changes, and may well also be more daunted by regulatory changes such as the upcoming Renters’ Rights Bill, seasoned landlords have navigated tough landscapes before – and know that the long-term fundamentals of the UK property market remain strong.
Williams points out: “What we’re seeing are serious and very experienced landlords stepping in to build smart and sustainable portfolios. These often have a longer-term outlook, better tenant management and a greater understanding of risk compared to your average Joe who wants to just rent out his old flat.
“This is a net positive – it removes froth from the market, creates more consistent demand for specialist lenders and pushes innovation in finance products that actually serve the real needs of property businesses in the modern world.”
A more strategic approach taken by property investors – whether that be being more selective on location, property type or target tenant options – is likely to lead to better returns, and recent research from TDS revealed that landlords’ profits have actually risen over the past 12 months, despite higher costs.
More property investors using limited companies
To back up the concept of property investors becoming smarter and more attuned to market conditions, research continues to show a rapid rise in the number of buy-to-let landlords incorporating their portfolios.
The latest Landlord Trends report from Foundation Home Loans for Q2 2025 revealed in July that 20% of landlords now have at least one buy-to-let mortgage in a limited company, rising to 30% for portfolio landlords.
This increase in professionalisation reflects that property investors are not only navigating the tax landscape to boost the profitability of their investments, but also view the UK property market with a long-term outlook.
Looking at future plans, 63% of landlords planning to increase their portfolios said they would use a limited company to buy their next property or properties, compared with just 29% who said they would buy in their own name.
Jamie Williams adds: “We’re moving away from the one-man-band landlord and toward a more corporate, strategic approach to property investment.”
