Last updated: October 2025
With recent and upcoming changes making it more costly to be a landlord, the question “Is buy-to-let still worth it?” has been on all of our minds as we move through 2025. At Prosperity Wealth, we firmly believe that despite evolving policies and challenges, buy-to-let property investment remains a compelling investment option. With the right strategy and expert guidance, it can still provide steady returns and long-term growth.
Simply put, a ‘buy-to-let’ property is one you purchase with the specific intention of renting it out to tenants, rather than living in it yourself. It’s a popular investment strategy in the UK designed to generate rental income and potentially benefit from capital appreciation as the property’s value increases over time. While sometimes referred to as ‘buy-to-rent’, the principle is the same: acquiring an asset that produces a regular income stream.
Yes, property remains a cornerstone of many successful investment portfolios. While market conditions fluctuate, bricks and mortar offer distinct advantages:
Unlike stocks or cryptocurrency, property is a physical asset you own.
Over the long term, house prices in the UK have consistently trended upwards, offering opportunities for high-value appreciation.
Property provides a tangible asset that can balance out riskier, more volatile investments. Many investors weigh up buy-to-let vs stocks and shares and find property offers unique stability.
For a comprehensive overview, explore The Ultimate Guide To UK Property Investment in 2025.
Throughout 2024, the buy-to-let market experienced significant changes driven by government policies. As an investor in 2025, it’s vital to be aware of the regulatory landscape so that you are informed about whether buy-to-let is still worth it.
The conversation around energy efficiency in rental properties has been dominated by proposed changes to EPC ratings. The government had planned to raise the minimum required rating from the current ‘E’ to a ‘C’ for all new tenancies from 2025 and for all existing tenancies by 2028.
While the government has since scrapped these specific deadlines for the private rented sector, the long-term goal of improving the energy efficiency of UK housing stock remains. Therefore, upgrading properties to meet a higher standard is still a wise long-term investment. Properties with better EPC ratings are more attractive to tenants due to lower energy bills and they are better prepared for any future regulations.
Now landlords can no longer deduct their mortgage interest from their rental income. Instead they must declare their gross rental income (minus other expenses) and are taxed on that larger amount. They then receive a separate tax credit equivalent to 20% of their annual mortgage interest.
The problem is that this tax credit is only at the basic 20% rate even for higher-rate taxpayers.
Example (same landlord):
As you can see the landlord’s tax bill in this example has nearly doubled from £1,600 to £3,000 purely because of the Section 24 changes. This is why it has significantly reduced profits for many landlords, especially those in higher tax brackets.
The Renters (Reform) Bill, which was previously anticipated in 2025, has been postponed due to the general election and is not coming into effect this year. The bill’s future is uncertain, but it is now expected to be passed in early 2026 or later, with a possible staged implementation of its measures. Key proposed changes are expected to be a major focus, most notably the abolition of Section 21 “no-fault” evictions. It remains important for landlords and tenants to stay informed about the progress of the legislation.
A key change impacting investors this year is the updated rate for Stamp Duty Land Tax (SDLT). As of 1st April 2025, a new rate has been in effect for anyone purchasing a second property or an “additional dwelling”. The rate for these purchases is now 5%, an increase from the previous 3%. This is a crucial cost to factor into any new buy-to-let purchase.
Landlords face several obstacles in 2025 which must be navigated strategically:
While these challenges may seem daunting, they are manageable with the right support and planning. Here at Prosperity Wealth, we help make buy-to-let property investing more accessible and simpler by sharing our wealth of experience and knowledge.
Despite the hurdles, there are still many benefits of buy-to-let UK, and we believe it has a lot to offer:
If you’re new to property investment, here are the essential steps to get started:
At Prosperity Wealth, we simplify the process by offering our unique payment plan and managing every aspect of your investment, from finding tenants to property maintenance.
Identifying the “best” place depends heavily on your budget and investment goals. However, the key is to look for regions with strong and sustainable rental demand. Focus your research on areas with:
To see our latest analysis, read our guide on the best places to invest in UK property 2025.
While the UK buy-to-let market is certainly not dead, it has entered a more demanding phase that is less forgiving for casual landlords. A combination of factors, including government tax reforms, rising interest rates, and new regulations, has significantly squeezed profitability. This has led some landlords to exit the market by selling their properties. However, the fundamental demand for rental homes remains very high. Consequently, for investors who treat it as a serious business venture requiring diligent planning and research, buy-to-let can still represent a profitable long-term strategy.
Some landlords are selling due to the combination of higher taxes (like Section 24), stricter regulations (like EPC standards), and increased mortgage costs. However, this shift also creates opportunities for savvy, well-informed investors to enter the market and acquire properties in high-demand areas.
Yes, it can be. With strong rental demand, rising rents, and the potential for long-term capital growth, being a landlord can be very rewarding. Success in 2025 depends on running your property investment like a business: budgeting carefully, understanding the regulations, and ensuring your property is well-managed. Partnering with Prosperity Wealth ensures your investment is expertly managed, allowing you to maximise returns while reducing stress.
In the UK, the terms ‘buy-to-let’ and ‘buy-to-rent’ are used interchangeably and mean the same thing: buying a property with the intention of renting it out. ‘Buy-to-let’ is the more common and industry-standard term.
Oliver Thacker is a Property Investment Consultant at Prosperity Wealth. His experience stems from a background in local and national estate agencies, before he moved into the investment world to help clients build income-generating, off-plan buy-to-let portfolios.
For further information on all of our investment property opportunities and how Prosperity Wealth can help you grow your investment portfolio, whether you’re overseas or based in the UK, get in touch with us today via phone on +44 (0) 121 237 4610 or email [email protected] to get started on your investment journey.
