Nearly 100,000 landlords are predicted to leave the buy-to-let rental market before the end of the year, according to a survey – and separate data has pointed to small landlords already exiting.
As many as 93,000 buy-to-let (BTL) landlords – 6% of those with a BTL mortgage – are expected to sell up this year, according to data from a survey of 43 brokers used by landlords, carried out by Black & White Bridging, a lender.
HMRC data showed there were 2.84 million unincorporated buy-to-let landlords in the UK in 2023. Black & White Bridging estimated 57% of these – 1.62 million landlords – had a buy-to-let mortgage, based on data from the English Private Landlord Survey 2021.
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The number of buy-to-let landlords with a mortgage has already fallen by 65,000 between 2023 and 2024, according to Black & Whites’ research, and is now expected to drop by nearly 100,000 more by the end of the year.
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Damien Druce, chief operating officer at Black & White Bridging, said: “Not only does this survey indicate the loss of more than 150,000 landlords from the rental market over a two-year period, it also shows the rate of change is accelerating year-on-year.
“It’s likely these are landlords with small portfolios of one or two properties, landlords who don’t want to face the ongoing changes to regulation and rising costs.”
Separately, new data obtained by accountancy firm RSM UK from HMRC via a Freedom of Information (FOI) request pointed to smaller landlords already leaving the market.
It showed the number of taxpayers paying capital gains tax (CGT) on residential property and carried interest in the 2023/24 tax year has more than doubled when compared to seven years ago. Primary residences are exempt from capital gains tax so it is a good indicator landlords are the ones selling up and paying the tax.
Chris Etherington, private client partner in RSM, said: “The associated bump in tax receipts for the Treasury may ultimately prove to be short-lived if it is indicative of smaller landlords leaving the market.”
Small buy-to-let landlords selling up
Tax and other legislative changes have shifted the sands dramatically beneath the feet of UK landlords in the last decade or so.
One of the biggest tax changes has been the phased removal of mortgage interest tax relief for unincorporated landlords – landlords now only receive a tax credit equal to 20% of their mortgage interest payments.
Likewise the introduction of a 3% stamp duty land tax (SDLT) surcharge on second homes (later increased to 5%). The equivalent surcharge on properties purchased in Scotland, subject to land and buildings transaction tax (LBTT), currently stands at 8%.
These changes are unlikely to have affected landlords with larger portfolios, many of which operate via a company, rather than personally, meaning they are not impacted by the restriction on mortgage interest tax relief.
Similarly, some larger landlords may not be hit in the same way as smaller landlords on stamp duty, as acquisitions involving the purchase of six or more residential properties are treated as non-residential transactions and so the surcharge and higher rates of stamp duty would not apply.
Wider developments such as the Renters Reform Bill – with the abolition of ‘no-fault’ evictions – higher interest rates and a less buoyant property market have also contributed to an uncertain climate for landlords.
Etherington said: “We now appear to be seeing the consequences of all these changes with the established foundations of the property market being shaken up, as data suggests that more small and accidental landlords may be selling up.”
“Many smaller or accidental landlords may be wary of another Budget that appears to have significant tax rises on the agenda and could be tempted to re-evaluate their longer-term plans as a result,” he added.
Budget changes for landlords
The government is considering using the Budget to announce it will make landlords pay National Insurance (NI) on profits from rental income, in addition to income tax, in the hope of raising £2 billion, according to a report in the Times.
Shaun Moore, tax and financial planning expert at Quilter, said the proposal would be another significant blow to the buy-to-let sector. “Introducing an additional tax burden risks accelerating the exodus of landlords from the market, further reducing the supply of rental properties at a time when demand remains high,” he said.
“This imbalance will inevitably push rents even higher, worsening affordability for tenants and deepening the housing crisis. Similarly, the addition of NI would almost certainly be passed on to renters through higher rents, compounding the problem,” Moore added.
The increasingly popular practice of holding properties within a limited company structure could be expected to skyrocket, as landlords look for ways to mitigate the impact of the changes – curtailing any forecast revenue boost for the government.
A better approach might be to revisit the changes to mortgage interest relief, Moore suggested.
“Allowing landlords to deduct mortgage interest before calculating taxable income, then applying income tax and even NI if necessary, would create a fairer system and reduce the incentive for landlords to incorporate, while still ensuring the Treasury raises revenue without destabilising the rental market,” he said.
Pressure on landlords takes shine off BTL rate cuts
In better news for landlords, buy-to-let fixed rates have dipped to their lowest points since September 2022, and choice rose to a record high, according to Moneyfacts. The average two and five-year fixed rates stand at 4.88% and 5.21% respectively.
Overall the number of buy-to-let products (fixed and variable) rose to 4,597 deals, the highest since November 2011. There are still more five-year fixed deals than two-year fixed deals, but there are also record volumes of deals at 80% and 75% loan-to-values (LTVs), both for two- and five-year fixed options.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Landlords looking to refinance or enter the market may be encouraged to see that buy-to-let rates have dipped to their lowest levels since September 2022, both for a two- or five-year fixed term.
“Those landlords who locked into a fixed rate deal in 2023 and are due to refinance will find the average two-year fixed rate has fallen from 6.64% to 4.88%, and the rate has edged slightly lower than 5% since the start of June 2025 (4.98%).”
However, uncertainty about interest rates and the changes to mortgage interest tax relief in April 2020, meant some landlords would have grabbed a five-year fixed deal for peace of mind. In September 2020, the average five-year fixed rate was 3.20%, but today the difference in rate is around 2% more, at 5.21%.
“The cost of finance is a fundamental part of becoming a landlord, as tax changes over the years have led to a more challenging situation for investors to hit desirable profit margins. The speculation on more changes to hit private landlords in the upcoming Budget will also lead to more concerns,” Springall said.
Recent figures from UK Finance revealed buy-to-let mortgage repossessions are up by 11% year-on-year. A record 26% of landlords sold at least one property in 2024 while just 8% of landlords bought, according to a survey from the National Residential Landlords Association (NRLA).
