LANDLORD PROFITABILITY

The first of these shows that the average tax-paying landlord saw their profit fall by -11.2% in 2024-25. That was on the back of a +32% rise in finance costs.

Of course, not all landlords will be bearing such finance costs. Indeed, the income tax figures show that just under 40% of private landlords have a mortgage.

That provides a useful reminder that most landlords are debt-free. As such, the majority are relatively well placed to stand up to the regulatory and financial headwinds facing the sector, however downtrodden they may feel right now.

Those who do carry debt are likely to progressively find their finances squeezed, as their fixed rate mortgages come to an end. That suggests a further fall in taxable profits in 2025-26. But it also points to a much more gradual – and somewhat less dramatic – sell-off of buy-to-let properties than many feared.

LANDLORD SALES

This is supported by the second data release from the Tax Office. Its capital gains tax statistics suggest that sales of investment properties and second homes fell slightly in 2025-26, despite the Renters’ Rights Act working its way through parliament at the time.

The prevalence of a wait-and-see approach chimes with our recent prime landlords’ survey. It found that a relatively small number of investors (11%) had sold to date. Somewhat more indicated that they would consider a sale, as underlying conditions in the prime housing market improve.

A PRE-BUDGET FLURRY?

That is not to rule out another flurry of landlord sales in the run-up to the Autumn Budget. However, we expect the spike to be less pronounced this time around. The need to act quickly and the complexities of securing vacant possession since the abolition of section 21 is likely to temper any surge in sales.

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_{Read the articles within Prime UK Residential – Autumn/Winter 2026 below}