Most landlords remain committed to buy-to-let despite challenges

Most landlords remain committed to buy-to-let despite challenges

A recent survey reveals that over half of landlords in England still view residential property as a sound long-term investment, even amid increased regulation and financial pressures. However, many express concerns about profitability and the attractiveness of the sector.

More than 50% of landlords continue to believe that buy-to-let remains a good long-term investment, according to a survey commissioned by lettings agency Benham and Reeves. The research, conducted among landlords in England, also highlights a cautious outlook on the future of the private rental sector, with nearly 40% expressing some level of unconfidence.

The survey data, published in August 2026, shows that while most landlords intend to maintain their current portfolios, only a small fraction plan to expand holdings. Taxation and regulatory burdens remain significant barriers to further investment, overshadowing concerns about the Renters’ Rights Act and other regulations.

Survey findings on landlord confidence and investment intentions

The survey asked landlords about their confidence in the private rental market, profitability expectations, and investment plans over the next 12 months. It found that 50.6% of respondents believe residential property remains a good long-term investment despite regulatory and financial challenges.

Confidence in the sector’s wider future is more subdued, with 39.1% of landlords reporting they are somewhat or very unconfident, compared to 33.9% who remain confident. Profitability expectations are also a concern: 38.9% anticipate a decrease in portfolio profitability, while only 7.6% expect an increase, and 45.8% foresee no change.

Regarding portfolio size, 62.7% of landlords intend to maintain their current holdings over the next year. Only 3.9% plan to expand, whereas 13.0% aim to reduce their portfolios, and 14.2% consider exiting the rental market altogether. This means over a quarter of landlords are contemplating reducing or leaving the sector, a figure seven times higher than those seeking growth.

Taxation and regulation as barriers to investment

When questioned about obstacles to further investment, landlord taxation was cited by 28.3% of respondents as the biggest barrier. This surpasses concerns about the Renters’ Rights Act and broader regulation, which were mentioned by 15.1% of landlords. Property prices were the third most common barrier at 12.6%, followed by economic uncertainty, tenant-related risks, Stamp Duty, and mortgage costs.

Landlords also identified what would encourage them to invest more in rental properties. More favourable taxation was the leading factor, with 36.9% citing it as a key incentive. Lower Stamp Duty (13.7%), a faster or easier possession process (12%), greater economic confidence (11.6%), and reduced property prices (9%) were also noted.

The survey highlighted that traditional residential single-let properties remain the preferred investment type, favoured by 48.2% of landlords considering expansion. Properties requiring refurbishment followed at 18.3%, with holiday or short-term lets at 11.0%. Other options like HMOs, student accommodation, corporate lets, and new-builds attracted significantly less interest.

Context of landlord sentiment amid evolving rental regulation

The private rented sector in England has faced a series of regulatory reforms and increased financial burdens in recent years. The introduction of the Renters’ Rights Act and the abolition of Section 21 ‘no fault’ evictions have reshaped landlord-tenant relations and possession procedures. Additionally, tax changes such as the restriction of mortgage interest relief and increased Stamp Duty have reduced net returns for many landlords.

Despite these challenges, the survey suggests landlords have not abandoned buy-to-let as an investment strategy. The sector remains a critical part of the UK housing market, providing homes to millions of tenants. However, the diminished attractiveness of the role, as expressed by nearly 80% of landlords, indicates growing frustration with the regulatory and fiscal environment.

This sentiment aligns with broader concerns about rental supply constraints and rising rents. Landlords’ reluctance to expand portfolios or new entrants to the market could exacerbate these issues, potentially impacting tenant affordability and choice.

Practical implications for landlords and letting agents

For landlords managing small or medium portfolios, the survey’s findings underscore the importance of careful financial planning and risk assessment. With many expecting profitability to decline, reviewing rental income against costs, including tax liabilities and compliance expenses, is vital. Letting agents should be prepared to advise clients on navigating the evolving regulatory landscape and managing tenant relationships under the Renters’ Rights Act.

Maintaining portfolios rather than expanding may become a common strategy, with landlords focusing on maximising returns from existing properties. This could mean prioritising property maintenance, energy efficiency improvements, and tenant retention efforts to reduce void periods and arrears.

Landlords considering expansion should weigh the impact of taxation and regulatory costs on investment returns. The preference for traditional single-let properties suggests a cautious approach to more complex or niche rental markets, such as HMOs or short-term lets, which often carry additional compliance obligations.

Uncertainties and what landlords should monitor

While the survey provides insight into landlord sentiment, several uncertainties remain. The long-term effects of the Renters’ Rights Act on possession processes and rent collection are still unfolding. Changes to tax policy, including potential government reforms, could alter the investment landscape significantly. Economic factors such as inflation, interest rates, and housing market trends will also influence profitability and investment decisions.

Landlords should monitor official guidance and legislative developments closely, especially regarding possession procedures and compliance requirements. Staying informed about local licensing schemes and safety regulations remains essential to avoid penalties and ensure tenant safety.

Letting agents and landlords alike should prepare for continued regulatory evolution and potential shifts in tenant behaviour, adapting management practices accordingly.

What landlords should consider now

• Review current portfolio profitability, factoring in tax changes and compliance costs.
• Stay updated on possession law changes and the practical impact of the Renters’ Rights Act.
• Evaluate tenant demand and property types carefully before considering portfolio expansion.
• Engage with professional advice on tax planning and regulatory compliance.
• Maintain thorough records of property maintenance, communications, and tenancy agreements to support compliance and dispute resolution.

Supporting landlords with compliance and portfolio management

Membership of The Landlord Association (TLA) offers landlords and letting agents access to practical compliance resources and guidance tailored to the evolving regulatory environment. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, is designed to help members organise portfolios, manage rental documentation, and keep track of key compliance actions.

ORBIT’s features under development include tools for recording repairs, inspections, and communications, which are critical in demonstrating adherence to safety and tenancy obligations. Members can also access TLA’s up-to-date compliance materials and benefit from the property management AI assistant to streamline administrative tasks.

Exploring TLA membership and ORBIT BETA access can support landlords in maintaining regulatory standards and preparing for future changes in the private rented sector.

Looking ahead, the balance between regulatory demands and investment incentives will continue to shape landlord behaviour. Close attention to policy developments and proactive management will be essential for sustaining rental supply and meeting tenant needs.

Sources: Landlord Today