Homes getting hammered

For years, buy-to-let sat quietly in the background of British investing. It wasn’t flashy or complicated, yet it proved reliably effective. You bought a house, let it out, and the rent covered the mortgage with a little left over. It offered a physical asset you could see, touch and ultimately do what you pleased with.

Then came the boom in property TV programmes, where shows like Homes Under the Hammer turned the idea into something close to a national pastime for amateur investors. With overnight transformations, tidy yields of 8–10%, and capital growth that seemed almost effortless, thousands of overnight experts decided to have a go.

With the market flooded by this wave of new investors, demand soon outpaced supply, pushing home ownership further out of reach for many. In recent years, the Conservative government had already begun chipping away at the issue through tax reforms designed to cool the sector, yet Labour have taken this significantly further with the Renters’ Rights Act 2025, coming into force in May 2026. This could be the moment buy-to-let shifts from a gentle headwind to a genuine turning tide.

Clause and effect

As a starting point, every rental property must now register on a national private sector database. The aim is transparency; the effect is yet more administration, cost and compliance for landlords who previously operated with far greater freedom.

The most significant structural change introduced by the Act is the end of fixed‑term tenancies. From day one, every tenancy becomes open‑ended. Tenants can move out with two months’ notice, even if they collected the keys only weeks earlier removing a piece of stability landlords once relied upon through six‑ or twelve‑month contracts.

Rent reviews have also been overhauled as landlords may only increase rent once per year, and even then, only by serving a statutory notice with two months’ warning. Crucially, tenants have every incentive to challenge the rise, because even if the increase is ultimately upheld, the very act of disputing it can delay the increase by up to six months. It is another example of the legislative pendulum swinging firmly towards the renter.

The balance of power in evictions has shifted too. “No fault” evictions have been removed and replaced with a requirement to prove a valid reason for possession, often through the courts. Situations that once felt straightforward, such as selling a property, moving back in, dealing with persistently late rent, now involve longer timelines and tougher thresholds. Any landlord who has ever dealt with a problematic tenant knows the reality: months of delay, irregular or missing rent, and costs that feel wildly disproportionate to the situation.

Pet ownership, another hot topic, and one that exploded during the Covid pandemic has also found its way into the new regime. Tenants now have the right to request a pet, and landlords must consider it reasonably. Thankfully, the legislation does at least acknowledge the real world: you can reasonably refuse a Great Dane, or any animal incompatible with the property. A small mercy, especially if you don’t fancy having a 20-foot reticulated python cosying up in your living room.

Another subtle but important change is the clampdown on financial protections for landlords. Bidding wars on rent are now banned, so if you market at £1,000 per month, you cannot accept more, no matter the demand. Likewise, no upfront rent can be taken, removing a long‑standing tool for managing risk when assessing students, overseas tenants or the self‑employed.

May Day, May Day!!

It’s also unlikely that you will have time to plan for the upheaval, as every existing tenancy in the country will be converted overnight, so by May Day the reforms take effect. Even landlords who were midway through carefully structured fixed terms will find themselves operating under an entirely different set of rules, with no transition period.

Layer these reforms onto an already demanding tax environment including reduced mortgage interest relief, higher stamp duty, and tighter lending rules, and the direction of travel feels unmistakable. Being a private landlord is no longer a straightforward commercial investment. It is becoming a highly regulated public service, where the balance of risk sits squarely on the landlord’s shoulders.

Rent and sensibility

Leigh Lawler, founder of Lawler & Co Estate Agency in Poynton, says the impact is already clear: “We’re seeing landlords looking to exit the market, but of bigger concern is the appetite for landlords to take on new properties. This used to be a massive area for us but has dwindled considerably over recent years.”

Some landlords will adapt, just as they did during earlier tax changes. The sector may also gradually become more professional, as hobbyist landlords decide it’s simply more hassle than it’s worth and step away altogether. This shift aligns with the government’s long‑term ambition, although it raises one uncomfortable question.

If private landlords retreat from the market, who provides the homes renters still need?

That, it seems, is a conversation for another day.

If you are reviewing your options for your property portfolio or have any questions, we are always happy to help. Please call us on 0161 486 2250 or speak to your financial planner to explore the right approach for your circumstances.