But with strong rental demand and the willingness to adapt, many landlords are still finding ways to make it work.
The private rented sector has seen significant change, with tax, regulation and higher borrowing costs pushing some landlords out of the market.
But that’s only part of the story.
Across much of the UK, demand for rental homes remains strong and yields are high, with many landlords continuing to invest.
After all, privately rented property still accounts for around 20% of all UK housing stock and there is still an undersupply of homes.
Managing higher mortgage rates
One of the biggest challenges for landlords right now is the rise in borrowing costs.
Many existing buy-to-let borrowers are refinancing onto much higher rates than they secured five years ago.
According to Moneyfacts, average five-year fixed buy-to-let mortgage rates rose from 5.05% to 5.72% in March alone this year. That’s more than double the typical mortgage rates landlords were securing in the mid-2% range in 2021.
This has led borrowers to review their portfolios more closely, particularly where margins are tight. It’s also a barrier to aspiring landlords, as it can make it harder to get the numbers to stack up.
But it’s not just borrowing costs that will concern landlords in 2026.
Cost of rules and regulation
Over the past decade, changes to tax relief on mortgage interest and the stamp duty surcharge have added significantly more financial pressure.
The introduction of the Renters’ Rights Act on 1 May is another major regulatory shift for landlords to deal with.
It’s designed to give tenants more security and protection in their homes. The Act makes it harder for landlords to end tenancies without a clear reason and puts tighter rules around rent increases, so tenants have more stability and time to plan.
For landlords, that means less flexibility and more formal processes to follow. Managing tenancies well from the start and maintaining good communication will become even more important.
While many of the Renters’ Rights Act reforms begin in May, it’s a large piece of legislation and will take years, not months, for all measures to be fully in place.
At the same time, landlords are potentially facing tighter energy-efficiency rules from 2030 when any privately let property will need to have a minimum EPC rating of a C. Nearly half of landlords own a property rated D or below, so will need to invest in retrofitting to bring them up to scratch under the proposed new rules.
Some might be put off by this increased cost and complexity.
Strong demand supporting the sector
Despite these challenges, buy-to-let still offers a compelling investment for existing and aspiring landlords.
Affordability pressures for first-time buyers, along with a shortage of homes in many areas, are continuing to support the rental market. This is pushing rents higher.
According to the Office for National Statistics, average UK private rents increased by 3.5% to £1,374 in the 12 months to February 2026. Typical yields across the UK are 6.93% according to Paragon Bank, which won Best Professional Buy-to-Let Mortgage Lender at the Your Mortgage Awards.
In March 2026, there were 4.8 enquiries for each available rental property, while supply remains 23% below pre-pandemic levels. This imbalance means rents are expected to keep rising through 2026 while void periods remain low.
According to the English Private Landlord Survey, landlords have higher than average overall income. Combining income reported from rent and other sources, landlords’ median total gross annual income in 2024 was £52,000 and one in five (21%) had a total gross income of £100,000 or more.
A more professional approach
The buy-to-let market is becoming more professional and complex. Both mainstream and specialist lenders support landlords with traditional and more complex needs, such as those with larger portfolios, non-standard properties or via limited company lending.
Aldermore, which was awarded Best Specialist Mortgage Lender at the Your Mortgage Awards, offers an innovative multi-property mortgage, allowing landlords to put 30 properties onto one product, with a single rate, fee, monthly repayment and renewal date.
The Mortgage Works, which was named Best Buy-to-Let Mortgage Lender, also supports the full range of buy-to-let borrowers, from first-time landlords to portfolio and limited company landlords and those buying Houses in Multiple Occupation.
Both are part of the UK’s diverse and competitive buy-to-let mortgage sector, which spans the big banks, smaller building societies and specialist lenders, helping landlords of all sizes and experience to fund their investments.
Adapting to the new normal
The buy-to-let market today looks vastly different to a decade ago, and it’s unlikely to suit everyone in the current environment.
It can be a challenge to balance the costs and effort involved with the tighter potential returns. For some, the additional expense and regulatory requirements may outweigh the benefits.
It certainly requires a more hands-on, informed approach. That means reviewing your mortgage portfolio regularly, investing in property improvements, keeping up to date with changing rules and adjusting your expectations on returns.
But for those willing to take a long-term view and approach it as a business, buying property to let can still offer a steady income stream and the potential for capital growth over time.
