The UK’s buy-to-let market has seen a sharp decline in landlord activity, with the number of property purchases dropping significantly over the past year. According to new analysis, around 85,000 fewer homes were acquired by landlords, signalling a major shift in the sector.
The findings come from Dwelly, a lettings software provider, which drew on data from both The Mortgage Works and HMRC to paint a clearer picture of the current market. The figures highlight a noticeable slowdown in landlord acquisitions, which is reshaping the rental property landscape.
In the last 12 months, just 170,520 buy-to-let purchases were recorded. This is a steep fall from the 255,780 transactions seen in the previous year, amounting to a 33% year-on-year reduction.
The analysis also looked at how many landlords are actively growing their portfolios. Out of the UK’s estimated 2.84 million landlords, only 6% chose to invest in additional properties in the past year. This compares to 9% who did so in the first quarter of 2024, showing a clear dip in appetite for expansion.
Taken together, these figures underline a more cautious stance from property investors. Landlords appear increasingly hesitant to commit to new purchases, possibly due to ongoing regulatory changes, market uncertainty, and shifting financial pressures.
Landlords are worried about the RRB
Dwelly links the recent slowdown in landlord purchases to concerns surrounding the upcoming Renters’ Rights Bill. The legislation is set to introduce tougher tenancy rules, new eviction procedures, and stricter compliance requirements, which many landlords are closely watching.
According to the firm, a large number of landlords are choosing to hold off on new investments until the finer details of the bill are confirmed. This period of hesitation reflects the uncertainty currently hanging over the private rental sector.
However, Dwelly suggests that this pause may only be temporary. Once the legislation is in place, landlords are expected to return to the market, especially in areas where rental demand is high and yields remain strong.
Commenting on the findings, Sam Humphreys from Dwelly explained that the 85,000 decline in landlord purchases over the past year highlights how confidence has been hit. He pointed to a combination of factors, including uncertainty over new regulations, the rising cost of borrowing, and weaker house price growth.
Even so, Humphreys stressed that this is not evidence of landlords abandoning the market altogether. Instead, many are stepping back to assess the situation before making further commitments. With the Renters’ Rights Bill likely to reshape the sector significantly, he suggested that caution is a natural response.
Biggest landlord investment falls
Recent figures show regional variations in landlord purchasing, with some areas proving more resilient than others despite the overall slowdown.
In the North East, activity has held up better than most regions, with 17% of the area’s 67,000 landlords making acquisitions. However, this is still lower than the 22% recorded the previous year, reflecting a clear drop in confidence.
The East of England took the lead in overall numbers, with 23,360 buy-to-let purchases over the past year. This placed it ahead of the East Midlands, which reported 21,720 acquisitions, and the South East, where 18,760 purchases were completed.
The South West also remained active, registering 18,300 transactions. Close behind was the North West, with 18,080 purchases, showing that investor interest is still present in these regions, even if at reduced levels.
In the West Midlands, landlords accounted for 16,160 new acquisitions. London, despite being one of the country’s most prominent rental markets, recorded a more modest 14,010 purchases, suggesting that higher costs and market pressures may be limiting activity there.
The North East, while proportionally stronger, still saw only 11,390 transactions in total. Meanwhile, Yorkshire and the Humber followed with
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