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Is BTL still worth it? – Cox

Is BTL still worth it? – Cox

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Posted:
June 11, 2025
Updated:
June 11, 2025

If, like me, you've been reading the newspapers recently, you’d be forgiven for thinking that the buy-to-let (BTL) market is in trouble. But behind the headlines, how much is actually true? I would argue little.

Of course, it cannot be denied that there have been and continue to be bumps along the road for landlords. Regulatory and tax changes have pushed the sector to continue to professionalise. This comes with an increased administrative burden on landlords, particularly those with smaller portfolios.

However, these changes also come with benefits. A professional rental sector benefits us all, with better-quality housing available.

 

Renters’ Rights Bill

One of the big changes coming down the line for landlords is the Renters’ Rights Bill. Due to become law in early autumn, the Renters’ Rights Bill is expected to bring the most significant reforms to the private rented sector for a generation. This includes the removal of fixed-term tenancies, the abolition of Section 21 and no-fault evictions and mandatory registration for landlords.

In addition, landlords will be prevented from increasing rents more than once per year and any increases should be in line with the market. The Decent Homes Standard will also be included, making sure homes are safe, secure and hazard-free.

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EPCs

Energy Performance Certificate (EPC) regulations for BTL properties are also on the horizon, having been long rumoured during previous governments. This will mandate that rental properties must have an EPC rating of C or above in order to be rented. For landlords with older properties, this could require significant investment. However, we are still waiting on any details.

 

The road to professionalisation

It’s widely agreed that these moves will help the BTL sector to professionalise further, a trend that has been happening over the last few years, with professional, portfolio investors (those with over four properties) staying in the market while so-called ‘dinner party landlords’ exit.

Professional investors will typically manage their portfolios full-time and will naturally understand that offering tenants quality, energy-efficient properties will lead to fewer void periods and longer tenancies.

 

So is it still worth it?

Across the UK, the average rent rose 7.4% (Office for National Statistics (ONS): up to April 2025), with rental yields in some areas of the country hitting over 9%, according to data from Hamptons and the Land Registry. House prices are also on the rise, increasing by 7.4% YOY in April 2025. All of this to say that property remains a good investment for those with the resources and capacity to take it on.

Professional landlords have also been adapting to changing market conditions, with many seeking opportunities within more specialist, higher-yield asset classes such as houses in multiple occupation (HMOs), multi-unit freehold blocks (MUFBs) and semi-commercial properties.

The private rental sector plays a crucial role in the UK housing market. Whether renters are saving up for their own property or prefer the flexibility of renting, there will always be a need for high-quality rental accommodation. Therefore, for professional landlords with the appetite to embrace change and continue to evolve their portfolio, there are still opportunities within the market.

At Shawbrook, we speak with entrepreneurial landlords every day who are meeting these challenges head-on, and who are set to benefit from doing so.

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