- The number of homes available for rent is rising, but there are still 22% less rental properties available in 2024 compared to 2019
- In 2019, it was estimated that there were 2.66 million private landlords, while in 2024, this figure had decreased to around 2.5 million
- Rental prices are forecast to rise by an average of 3.5% per year until 2028
- Limited companies are now making up a significant majority – 70% – of all buy-to-let purchases in England and Wales, according to estate agency Hamptons.
New research shows a 25% drop in England’s rental properties since 2019, despite a 22% rise in tenant demand.” (Zoopla, November 2024).
In 2019, there were an estimated 2.66 million private landlords in the UK, based on HMRC and government data. By 2024, this figure had decreased to around 2.5 million, including those with one or more properties. The volume of activity has notably declined, with only around 12,000 new buy-to-let purchases recorded annually.
The number of buy-to-let (BTL) investors in the UK has been affected by various factors, including tax changes, interest rate increases, and regulatory shifts. To restore rental price growth to pre-pandemic norms of 2-3%, approximately 120,000 additional rental properties are needed to balance the current demand.
For a long time, investing in buy-to-let was seen as a sure-fire way to make money. But, over the last five years or so, regulatory and taxation changes have dented its appeal.
Mish Liyanage, CEO of The Mistoria Group, commented: “The UK rental market faces a seismic shift in 2025, driven by soaring demand, rising rents, and evolving tenant priorities. The Government’s renters’ rights bill, ending Section 21 ‘no-fault’ evictions, is expected to become law by summer 2025, marking a pivotal moment for the BTL sector.
“Rising mortgage rates and reduced profitability are pushing landlords to reassess their portfolios. With rental prices expected to rise 3.5% annually through 2028 and strong demand in regions like the North East and West, professional landlords are seeking opportunities in a challenging market.
“The UK rental sector is experiencing a supply-demand imbalance that continues to drive prices upward, with rental prices are forecast to rise by an average of 3.5% per year until 2028.”
Chronic undersupply, rising tenant demand, and economic factors have created a challenging yet opportunity-rich market. More buy-to-let landlords are turning to Limited Companies to reduce their tax burden.
According to estate agency Hamptoms, Limited companies are now making up a significant majority – 70% – of all buy-to-let purchases in England and Wales. Between January and September 2024, 46,449 limited companies were set up to hold BTL properties, 23% more than in the same period last year.
Mish Liyanage, an experienced property investor, highlighted that limited companies allow landlords to fully deduct mortgage interest from taxable income. “In contrast, landlords who own properties personally can only claim a 20% tax credit on mortgage interest, with higher-rate taxpayers losing out on full deductions.
“Limited companies will also pay 25% corporation tax on rental profits, whereas a higher-earning landlord could pay 40% or 50% income tax. However, landlords will have to pay tax on any salary they take from their limited company, so some of those tax savings may be lost.
“Currently, limited companies own 666,831 privately rented homes in England and Wales, according to Hamptons – about 13% of the government’s estimated total of around 5.1 million. With companies making such a large proportion of purchases, and record numbers of landlords quitting, that share is likely to increase quickly.”
Over the last 15 years, The Mistoria Group’s strategic approach has resulted in a varied portfolio encompassing more than 2,000 tenancies, including residential, student, professional HMOs, and commercial properties across the North East and West.
For more information on property sales, purchases, or joint venture opportunities, contact t: 0800 5003015 e: info@mistoriagroup.com.
