The new UK Renters Rights Act

 

Ben Beadle, chief executive of the National Residential Landlords Association believes the changes are coming too soon. 

 

He says the regulations needed to update all tenancy agreements in England will not be published until January, giving the buy-to-let sector just four months to prepare.

'That effectively gives just four months to inform over 11 million tenants in England about changes to their tenancy agreements alongside all the work needed to ensure landlords, letting agents, councils and the courts are ready for the impact of the Act,' Beadle said.

 

More admin thanks to Making Tax Digital 

April will bring major changes landlords in the way that many landlords report their income and spending to HMRC.

 

From 6 April, those earning over £50,000 from self-employment or property income will need to start making quarterly submissions to the taxman. The first filing will be due on 7 August. 

 

This is part of HMRC's shift towards digital record-keeping - what it is calling Making Tax Digital for income tax.

 

The move is expected to affect approximately 780,000 people in its first wave, with another 970,000 to follow from April 2027 and further expansion in 2028.

 

The first group affected includes sole traders and landlords with gross income over £50,000. 

 

Those earning between £30,000 and £50,000 will follow in April 2027, with further expansion to those earning £20,000 or more from 2028.

 

The income threshold is based on gross income, not profits, which means even those making modest earnings after expenses could still be caught by the new rules.

 

The new reporting regime will add further costs, and administrative burdens for buy-to-let landlords, according to Heather Powell, head of property at tax advisors, Blick Rothenberg.

 

'Filings will only be possible via commercial software that a landlord has to purchase, or their accountant,' she says. 

 

'The returns for buy to let investors, particularly those with less than three properties, are going to be significantly impacted by this new regime. It is likely to be the final nail in the coffin for many.'

 

'Investors, especially those whopurchased a buy to let property to supplement their pension may feel that the administrative burdens now associated with the investment and reduced profits, make it the right time to sell up.'

 

Around a quarter of landlords said they were not at all, or not really, aware of the changes to come, according to an NRLA study.

 

That is despite 67 per cent of landlords saying they expect the rules to affect them by 2028. 

 

Stricter energy efficiency rules on the way

Changes to Energy Performance Certificate requirements have been hanging over the sector for a number of years now.

 

The EPC is a rating scheme which bands properties between A and G, with an A rating being the most energy efficient and G the least efficient. 

 

At present, landlords need to ensure their property has a minimum energy performance certificate rating of E in order to let it, unless they are exempt because they own a period property. 

 

EPC certificates are valid for 10 years and all landlords must provide a copy to tenants before they move in.

 

Failure to do so can lead to large fines and stop a landlord from being able to let their property in future. 

 

Energy secretary Ed Miliband announced earlier this year that all privately rented properties must have a rating of C by 2030. 

 

It will be harder to raise rents 

In recent years it seemed that the only way was up for rents with too few properties available and too many renters competing over them.

 

But the market seems to have calmed down with rents in some locations now falling. 

 

While the average UK rent has risen 2.3 per cent over the last 12 months to £1,337, according to the HomeLet rental index, rents fell 0.6 per cent in the month of November - the last for which data is available. 

 

Those in the East Midlands and North East will have seen rents rise 4.8 per cent and 4.1 per cent over the year, on average.

 

Meanwhile, the typical home in the South East is fetching 1.1 per cent less than a year ago. 

 

Looking ahead, the rental demand and supply imbalance of recent years seems to be reversing at quite a pace and this could lead rents to fall in some areas.

 

The average number of homes being put up for rent each month rose from 99,739 in 2024 to 108,348 per month in 2025, according to the estate agent membership body Propertymark.

 

It says the rent agreed by tenants also fell from £1,511 a month in 2024 to £1,505 a month in 2025.

The property website Zoopla has recently described the weakest rental market conditions for six years. 

 

The number of tenants seeking a home has fallen by 20 per cent over the last year, it says, while the number of homes available to let has risen by 15 per cent. 

More landlords will set up in companies 

The dramatic increase in buy-to-let properties held in limited companies seen over the last decade has been driven by younger, newer landlords buying property within a company structure from the outset, according to research by Paragon Bank. 

 

Holding property in a limited company, also known as 'incorporating', is an alternative to holding property in one's personal name.

 

It can come with various tax advantages, including the fact that corporation tax - payable in a company structure - is lower than income tax, which is payable for landlords who own properties in their own name.

 

This allows landlords to build up profit within the company, which they can use it to re-invest towards another property sooner than they might otherwise have done if owning in their own name.

Paragon found that nearly one in three hold their properties exclusively via a limited company structure, with another 36 per cent splitting ownership between corporate entities and personal names.

It says that two‑thirds of landlords have created at least one company for their buy-to-let investments. 

 

Paragon says that amongst landlords aged 25-34, 57 per cent of properties are held in limited companies, while 43 per cent are owned through a mix of corporate and personal names.

The mortgage lender says that seven out of 10 landlords planning to purchase a new buy-to-let property will utilise a limited company structure.

 

'In a bid to mitigate the impact of tax changes introduced in the latter half of the previous decade, the last 10 years has seen more and more landlords opt to hold their buy-to-let properties in limited companies,' said Louisa Sedgwick, managing director of mortgages at Paragon Bank.

 

'Interestingly, our research shows that younger and newer landlords are more likely to structure their portfolios this way and do so earlier on in their landlord careers.'

 

Aneisha Beveridge, head of research at estate agent Hamptons also expects landlords to increasingly turn towards the company structure in the years ahead.

 

'Despite the challenges, investment hasn't stopped – it's increasingly concentrated among larger portfolio landlords who are targeting higher-yielding homes in the North of England to make the numbers work,' said Beveridge.

 

'At the same time, many are restructuring to shelter from a punitive tax environment, with limited company incorporations on track for another record year in 2025. 

 

'This shift, alongside preparations for Making Tax Digital, shows landlords aren't planning to exit – they're adapting for the future.'