Most landlords make profit despite regulatory changes – report

Most landlords in the private rented sector are still seeing a profit despite recent regulatory changes, a new report has claimed.

In the quarterly panel report from Birmingham Midshires Solutions (BMS), 88% of landlords surveyed say they will still make money despite slips in confidence in the overall market picture. However, those with larger portfolios are not feeling as secure as they once did, with three-quarters of those with 11 to 19 properties saying their profitability has gone down.

Larger portfolios to be reduced in 2019?

Just under a quarter (23%) of landlords say they intend to sell at least one property this year, but those in the 11-19 portfolio bracket are twice as likely to sell in 2019. Just 15% of all landlords are planning to buy this year.

There have been a number of regulatory changes made in recent years that are beginning to have an effect. Since April 2017, how rental income is declared has changed, resulting in significant tax implications for landlords.

Mortgage interest tax relief is set to reduce each year until April 2020; landlords can claim 50% of their mortgage tax relief but this reduces to 25% in the 2019/20 financial year, before the introduction of the new tax credit in April 2020 when they will no longer be able to deduct any mortgage expenses from rental income.

The stamp duty surcharge introduced in 2016 made property investment pricier for many, with an extra 3% tax liable on all additional home purchases not intended for owner-occupation,

Research by Foundation Home Loans in 2018 revealed that three out of five landlords plan to persevere in the buy-to-let market for another six or more years, while portfolio landlords in particular are the most likely to be planning on continuing to operate in the long-term and expanding their property stock.

Different picture from different regions

The research by BMS also shows regional variations in how landlords feel about the current state of play. Tenant demand was up by 8% in the East Midlands, and by 6 in the north-west and south-west of England but fell by 11% in London. At 5.6%, rental yields are at their lowest for three years but with 88% of landlords turning a profit there is some cause for optimism.

Phil Rickards, Head of BM Solutions, said: “This quarter’s Landlord Panel research paints a more cautious picture from the last quarter when landlords did not experience any financial difficulty.

“The buy-to-let industry has been through many regulatory changes over the past few years, and the effects of this are clearly being felt.

“However, the landscape is not entirely bleak. The proportion of landlords making a profit from their lettings activity remains at 88%, equalling the record high seen in quarter three 2018.”

“It is clear that the market is sensitive to the current legislative and macro-economic environment and this has been reflected in the latest findings.”


Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT