Thinking of selling your buy-to-let property?
Many landlords are weighing up the challenges of the property market in 2025, and wondering whether they should persevere or part with their investment. When looking at the upheaval of global markets, the advent of the Renters Rights Bill and higher mortgage costs, it’s easy to consider the merits of a sale.
Even so, we’d like to suggest that you are better off waiting, and instead finding strategies to overcome the problems with your buy-to-let investment. So, if you’re a landlord in locations like Vauxhall, Elephant & Castle, Wapping or Surrey Quays – explore the pros and cons of selling your rental home, ways to avoid selling up, and the key trends causing landlords to sell.
Being a landlord in London can be confusing. There are over 170 Acts & Regulations to consider, so, how do you know if you are compliant?
Anecdotal evidence suggest that this is the case, alongside several surveys. For example, data from This Is Money claims that there has been a jump from 11.7% to 17.4% in the percentage of properties for sale being ex-rental properties in 2025, compared to 2024. That said, major indexes like the ONS do not track this figure specifically. At the same time, many landlords are opting to move their properties into limited companies and restructuring their investments instead.
Despite suggestions of a market exit in 2025, there is reliable data to suggest the rental market has stabilised since the upheaval of 2022. Zoopla’s latest data indicates a continued demand for rental property and sustainable 3-4% in rent increases over the next year.
So, while there is much bluster about landlords leaving the market, there are many good reasons to stay.
Want to be a more informed landlord? Before deciding, weigh up how much you can increase the rent against how much it costs to rent out a property in the current market.
Many consider selling their rental properties due to rising costs, the burden of compliance and the time spent on management. Equally, because of these same reasons, landlords who are somewhat near retirement may consider selling their portfolio early to exit the market and cash out.
Let’s look at these reasons in more detail…
Mortgage rate increases are one of the key, financial reasons why landlords are looking to sell up. Long gone are the days when the Bank of England base rate sat at 0.5%, and landlords could get a BTL mortgage at an interest rate of a couple of percentage points. With interest rates currently sitting at 4.5%, and the average BTL mortgage hovering around 5.09%, many landlords are reconsidering their investment.
Stamp duty land tax (SDLT) changes are another financial factor, with the surcharge for second properties rising by 2% (on top of the standard rates). This is in addition to there being a new, chargeable band within SDLT for properties that cost between £125,000 – £250,000 (2%).
Add to this the more general ‘cost of living crisis’, and it is easy to see why landlords like yourself may be tempted to jump ship due to rising costs.
Compliance regulations have steadily grown over the past 10 years, and the Renters Rights Bill is perhaps the most significant piece of new legislation for landlords to wrestle with. This new bill is likely to pass into law at the back end of 2025, with significant implications for all corners of the Private Rented Sector (PRS).
The abolition of Section 21 evictions, harsher fines for landlords, new costs via the landlord database and property ombudsman, rent setting regulations and property improvement imperatives are a major headache. But perhaps the most significant challenge is the most mundane. Simply put, it will mean more paperwork, more admin and more time spent learning the new rules.
Add to this the fact that the age of the average landlord in the UK is 58, and it’s clear to see why many are considering cashing out of the market a few years shy of retirement.
There is real danger on missing out on the capital appreciation and steady rental demand if you choose to sell up now. Explore the pros and cons associated with selling your rental property, versus keeping it and holding out for long-term gains.
If you’re considering reinvesting elsewhere, buying an ex-council flat and warehouse conversions in London are both worth a look.
We firmly believe that for many landlords, there are viable solutions to try before you sell up. The strategies we suggest will help you manage your properties more effectively, addressing the common pain points for the landlords we work with.
Here are some strategies to explore to avoid selling your buy-to-let property…
Many landlords are coming off low fixed-rate mortgages and facing Standard Variable Rates (SVRs) of 7%+ (as of early 2024). If you had a £200,000 buy-to-let mortgage, you could move from a 7% SVR to a 5% fixed rate to save (e.g.) £3,900+ per year. While rates are still high, they have come down from their peak in 2023, so it’s important to consult your letting agent and financial advisor to check the market for new, more favourable deals.
If your primary concern is the effort and complexity of property management, then it is wise to choose an experienced, local estate agent to do this for you. This cuts out the issues of collecting rent, finding tenants, conducting property inspections, being called out for minor maintenance and handling much of the compliance burden. We offer an end-to-end management service for 14.4% of monthly rent (including VAT).
If you’re concerned by unreliable tenants, letting agent fees and the burden of property management, then guaranteed rent may be the solution for you. Otherwise known as rent-to-rent, these schemes allow landlords to receive a guaranteed amount of rent each month and full property management by leasing their property to a third party for a set duration. Equally, rent guarantee insurance can offset some of the risks of letting your property, and allow you to rent your property with more peace of mind.
Deduct absolutely all the allowable expenses from your rental property income. This includes domestic item replacement, insurance policies, letting agent fees – and much, much more. You could also check if you are able to get government help to increase the heat efficiency, desirability and value of your rental property over the long term with the Boiler Upgrade Scheme, EV charge point grants, or Great British Insulation Scheme.
If you keep your rents low, you might attract and retain tenants, but this is a poor strategy in the long term. It is better to incrementally increase the rent each year in line with the market rate and inflation, rather than be forced to hike the rent significantly after years of keeping it low. Choosing to do this as regularly as your contract allows ensures you are receiving the money you need for your rental property.
Be warned, this solution is not for all landlords. However, if you are operating a large portfolio as an individual landlord, it may be advantageous to transfer these properties to a new, limited company, as a strategy for long-term tax savings. This works when, as an individual, you are in the highest income tax bracket (i.e. 45%), which is significantly higher than the 25% corporation tax rate, or the ‘small profits rate’ for companies pulling in less than £50,000 of profit per year. Talk to your letting agent and an experienced tax advisor to see if this option could work for you.
You may have been operating a certain type of rental for years, but this no longer suits the market. You should assess the market in conjunction with an experienced, local letting agent to see if your property has the features and qualities to appeal to high value tenants. For example, you may consider switching to an HMO property in a student-heavy area, holiday let or serviced accommodation.
Aside from other concerns, many landlords also wonder if it is possible to sell a property with tenants. This is perfectly fine, as long as you duly inform your tenants, respect their rights and have a good selling strategy in place. Since you will be selling to other landlords, you should consult your letting agent for potential buyers, or explore the option of selling by auction, which many landlords use to acquire new properties.
The answer to this question will be different for every landlord, but we think that in most cases, it is wise for landlords to hold onto their rental property investments, despite the short-term pain. This is because of the consistent capital growth of house prices and the very strong demand for rental property. On the other hand, if you are close to retirement and are keen to exit the market, it likely makes more sense to consider selling up to avoid further costs and a greater admin burden.
Talk to our letting agents in South East London today, in areas like Canada Water, The Cut, Waterloo and Shad Thames for tailored rental advice to help you thrive as a landlord through 2025 and beyond.
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Lee Whitelock
Director
Being a landlord in London can be confusing. How do you make sure you are compliant?