Property News
A New Era for Buy-to-Let? The UK Market's Remarkable Resurgence
The UK's buy-to-let market is experiencing a significant revival, with rental yields hitting their highest point in over a decade. As of April 2025, the average rental yield has reached 7.11%, a considerable jump from the low of 4.91% seen in 2017. This robust growth is largely fueled by strong tenant demand and a persistent shortage of available rental properties.
What's Driving the Growth?
A perfect storm of factors is making buy-to-let more appealing than ever. The primary driver is sustained tenant demand, as ongoing challenges with home affordability push more people into the rental market. This increased demand, coupled with a limited supply of new housing, creates a competitive landscape that allows landlords to command higher rents.
While broader economic concerns like inflation and rising interest rates exist, the property market has shown remarkable resilience. This has allowed landlords to capitalise on favourable conditions and improve their returns.
Navigating the Regional Divide
Not all investments are created equal, and this is especially true in the UK's diverse property market. Regional variations play a critical role in yield performance. While the national average is strong, certain areas are seeing significantly higher rent increases than others. This highlights the importance of strategic investment decisions to maximise returns. For example, cities in the North and Midlands are often outperforming traditional hotspots like London, with some areas offering exceptional yields due to more affordable property prices and strong local demand.
The Road Ahead: Challenges and Opportunities
Despite the positive trends, the buy-to-let landscape is not without its challenges. Landlords need to be aware of recent regulatory changes, most notably the proposed Renters' Reform Bill set to take effect in 2025. This bill aims to enhance tenant protections, which may lead to new compliance costs and alter existing landlord rights.
Coupled with a new climate of higher mortgage rates, which have surged to around 7%, landlords must carefully navigate these financial pressures. Successfully balancing these evolving market dynamics, economic conditions, and regulatory environments will be key to maintaining profitability.
The current resurgence of buy-to-let returns is a complex story of supply, demand, and policy changes. It's a noteworthy topic for everyone from seasoned investors to first-time landlords and policymakers, underscoring the dynamic nature of the UK's property market.
Landlord Trends & Properties Mortgage Lenders Avoid
Big Rise in Landlords Using Company Status to Reduce Tax Burden
Landlord Today – 01/08/2025
Incorporated landlords generally pay less tax than individual buy-to-let landlords.
The latest research conducted by Pegasus Insight on behalf of Foundation Home Loans reveals that 20% of landlords have at least one buy-to-let mortgage for a property held in a limited company – rising to 30% among portfolio landlords.
The study also highlights a sharp rise in incorporation, with the average proportion of a limited company landlord’s portfolio held in this structure more than doubling from 36% in Q1 2020 to 74% in Q2 2025.
Limited company ownership is especially common among portfolio landlords, with 34% reporting at least one incorporated property. Additionally:
- 7% of all landlords have fully incorporated portfolios.
- 13% hold a mix of personally and company-owned properties.
Future purchase trends also show a shift:
- 63% of landlords intend to buy through a limited company.
- Only 29% plan to purchase in a personal name.
- 0% of existing incorporated landlords plan to revert to individual ownership.
Refinancing trends show that portfolio landlords with 4+ buy-to-let mortgages are more likely to refinance via a limited company (30% vs. 8% for consumer borrowers). Key lender selection factors include:
- Minimal fees
- Overpayment flexibility
- Service quality
– Grant Hendry, Foundation Home Loans
Property – What NOT to Buy
Money Saving Expert – 04/08/2025
Mortgage lenders are not just selective about who they lend to – they’re also selective about the properties themselves.
There are many types of property that lenders don’t like, and buying one could mean:
- Reduced borrowing power
- Higher rates
- Mortgage rejection
Before committing to a property, it’s wise to check if the following types apply:
- Uninhabitable properties (no kitchen/bathroom, severe disrepair)
- High-rise flats, especially those over 5–10 storeys
- Concrete or prefab construction (non-standard)
- Short leaseholds (typically under 70 years)
Investors should do their due diligence early to avoid costly delays or disappointments when financing through a mortgage.
Dubious Sales Tactics at Two Leading Estate Agencies Uncovered
BBC News – 05/08/2025
A BBC investigation has uncovered dubious sales tactics at two of the UK’s leading estate agencies. The exposé, backed by undercover filming and whistleblower accounts, reveals how commission-based incentives were prioritised over customer service.
The report alleges that agents were encouraged to steer clients toward higher-commission deals, sometimes at the expense of buyers’ best interests. It raises concerns about transparency and ethics within parts of the property sector.
These revelations serve as a reminder for both buyers and sellers to stay informed, question advice, and seek independent support where possible.
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