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 into 2025. At Prosperity Wealth, we firmly believe that despite evolving policies and challenges, buy to let remains a compelling investment option. With the right strategy and expert guidance from Prosperity Wealth, it can still provide steady returns and long-term growth.
What’s New? Changes to Buy to Let in 2025?
Throughout 2024 the buy to let market experienced significant changes driven by government policies and market dynamics. Key updates include:
Legislation: Stricter energy efficiency regulations now require landlords to meet higher EPC ratings for their properties. While this increases upfront costs, properties meeting these standards are more attractive to tenants.
Stamp Duty and Taxation: Section 24 restrictions continue to impact mortgage interest tax relief, reducing profits for higher-rate taxpayers.
Rising Demand: Despite regulatory pressures, the demand for rental properties remains robust, driven by increasing rental prices and a growing number of tenants unable to buy their own homes.
Property Prices: While property values have stabilised in some areas, strategic purchases in high-demand regions still offer excellent potential for capital growth.
Renters Reform Bill: Although not in force yet, the new government introduced the renters rights bill to parliament, if passed this would change the rights of tenants & landlords and is something to keep an eye on throughout 2025.
Current Challenges for Landlords
Landlords face several obstacles in 2025:
Section 24: This ongoing tax change means landlords cannot deduct mortgage interest costs from rental income, leading to higher tax bills.
Higher Mortgage Rates: Interest rates have increased, making financing more expensive for new and existing landlords.
Increased Costs: Rising energy costs and maintenance expenses continue to squeeze profit margins.
SDLT Increases: From the 1st April 2025 a new rate of stamp duty will come into effect meaning anyone purchasing a second property or “additional dwelling” will have to pay 5% (up from 3%).
While these challenges may seem daunting, they are manageable with the right support and planning. Here at Prosperity Wealth, we help make investing more accessible and simpler by sharing our wealth of experience and knowledge with our clients. Get in touch with us today to find out how we can help you invest in 2025.
So, Is Buy to Let Still Worth It?
Despite the hurdles, we believe that buy to let still has a lot to offer in 2025:
Steady Rental Demand: The growing tenant population ensures consistent rental income for landlords.
Capital Growth Potential: Property remains a long-term asset with house prices continuing to rise steadily with opportunities for high-value appreciation in key areas across the UK.
Portfolio Diversification: Buy to let provides a tangible asset that balances out riskier investments like stocks or cryptocurrency.
Passive Income: With professional property management, landlords can enjoy hassle-free earnings knowing that their investments are looked after.
Partnering with experts like Prosperity Wealth allows you to maximise these benefits while minimising the stress of managing properties.
How to Get Into Buy to Let
If you’re new to property investment, here are the steps to get started:
Research Locations: Focus on areas with strong rental demand and growth potential.
Budget Wisely: Consider not just the purchase price but also ongoing maintenance, taxes, and other expenses.
Secure Financing: Explore buy to let mortgages and assess their viability with current rates.
Work with Experts: Collaborate with experienced property investment companies like Prosperity Wealth to navigate the market efficiently.
At Prosperity Wealth, we do the hard work for you and simplify the process by offering unique payment plans and managing every aspect of your investment, from finding tenants to property maintenance ensuring you are getting the best returns out of your investments.
Absolutely not. While some landlords have exited the market due to rising costs, many others continue to see buy to let as a profitable and stable investment. The key lies in adapting to the changes and leveraging expert guidance.
Why are landlords leaving the UK market?
Some landlords are selling due to higher taxes, stricter regulations, and increased costs. However, these challenges also create opportunities for savvy investors to enter the market, particularly in regions with high demand for rental properties.
Is buy to let still profitable in 2025?
Yes, buy to let can still be profitable. With strong rental demand and strategic property selection, landlords can achieve both steady income and capital growth. Partnering with Prosperity Wealth ensures your investment is expertly managed, allowing you to maximise returns while reducing stress.
