Is Buy to Let Still Worth It in 2026?

The headlines about buy to let have not been kind. Higher mortgage rates. Section 24 tax changes. The Renters' Rights Bill. Stamp duty surcharges. It's felt like a sustained campaign to make life difficult for landlords — and in many ways, it has been.

And yet. Rents across the UK have risen significantly. Demand from tenants is at record levels. And while some landlords have sold up, others have quietly been adding to their portfolios at what may turn out to be a genuinely good time to buy.

Here's a more honest look at what's actually going on.

The numbers that matter

The single biggest change to buy to let profitability isn't tax, or regulation, or stamp duty. It's mortgage rates.

When the base rate was 0.1%, a landlord could borrow at around 2% and rent the property at a 5% yield, leaving a comfortable margin. At 5%+ mortgage rates, that same property needs to be generating significantly more rent to wash its face — and in many parts of the country, it simply doesn't.

This is why the London suburban landlord who bought in 2019 at 75% LTV is in a very different position to the landlord in Lancashire who did the same thing but with a larger deposit and lower purchase price. Yield matters much more than it used to.

Where buy to let still makes sense

Broadly, the areas where buy to let still works:

• Higher-yield locations — the North of England, parts of the Midlands, Scotland. Properties that cost £120,000–£180,000 and rent for £700–£950 per month are still generating yields of 5–7%
• HMO properties — houses in multiple occupation generate significantly higher rents per square foot. More work to manage, but much better returns on the right property
• Limited company structures — many landlords are now buying through a limited company rather than personally, which sidesteps the Section 24 mortgage interest restriction. This doesn't work for everyone, but for higher-rate taxpayers adding new properties, it's often worth doing the sums
• Holiday lets — furnished holiday lets have their own tax treatment and can generate much higher income in the right location. Though the rules here have been changing too

Where it no longer makes sense

Standard buy to let in a low-yield area with a 75% LTV mortgage at current rates often doesn't produce positive cash flow any more. The numbers simply don't add up without significant capital growth — which is not something you can bank on.

The tax picture

The Section 24 changes (which restrict mortgage interest relief for individual landlords) have materially affected higher-rate taxpayers. If you're a basic-rate taxpayer, the impact is much smaller. If you're paying 40% tax, the difference is substantial.

Limited company buy to let isn't a magic wand — there are costs to incorporating, and eventually when you extract the profits from the company you'll pay tax on those too. But for someone building a portfolio from scratch, starting with a limited company structure is often the right move.

This is a conversation worth having with both a broker and an accountant before you buy anything.

What the smart landlords are doing

The landlords we see doing well right now aren't over-leveraged. They have at least 25% equity in their properties. They focus on yield rather than capital growth. Many are converting properties to HMO or short-term let use. And several are remortgaging now, while rates show signs of improving, to lock in better terms for the next few years.

Buy to let isn't dead. It's just less forgiving of slack underwriting than it was five years ago.

The honest question to ask yourself

If you removed the mortgage entirely and owned the property outright — would the rental income represent a good return on the capital tied up? If yes, it's probably worth pursuing with leverage attached. If no, you're relying entirely on capital growth, and that's a much riskier bet.