Is property still worth it?
Tax is up and confidence is down, yet some landlords are still buying. We looked at the evidence, and worked out where the numbers still add up.
of landlords name tax as the biggest barrier to investing more, nearly twice the share who name regulation.
bought vs sold a property in the past year. Buyers have outnumbered sellers in every year of the survey.
of under-35 landlords vs over-65s are looking to buy. Ownership is changing hands.
is what £1 in the average buy-to-let became over 30 years, against £8.96 in the FTSE 100. Over five years, shares did better.
areas of England and Wales fail our new Break-even Rate test for a higher-rate landlord from April 2027.
In August, a survey of 437 landlords in England asked one question: what is the single biggest barrier to investing more in rental property? Tax came first by a distance. Add regulation, and the two account for 43.4% of all answers.
The rest is spread across prices, the economy, tenants and running costs. That spread matters. No single policy change would lift confidence on its own, because different landlords are worried about different things.
| Item | Value |
|---|---|
| Taxation of landlords | 28.3% |
| Renters’ Rights Act and regulation | 15.1% |
| Property prices | 12.6% |
| Economic uncertainty | 9.8% |
| Problem tenants and rent arrears | 8.6% |
| Stamp Duty | 6.8% |
| Mortgage rates and finance costs | 6.2% |
| EPC and energy requirements | 5.2% |
| Maintenance and running costs | 5.2% |
| Lack of suitable properties | 2.2% |
437 current landlords in England, surveyed 17 August 2026, before the October Budget. Single-choice question.
say being a landlord is less attractive than it was five years ago
still say residential property is a good long-term investment
Both numbers come from the same survey, and together they sum up the mood. Landlords are not saying property is broken. They are saying it has become harder work, and that the return now has to be earned property by property.
Asked what would encourage them to invest more, 36.9% named more favourable tax, more than the next two answers combined. Lower mortgage rates came sixth, at 8.2%. Our break-even analysis in section 03 suggests the mortgage rate matters more than many landlords think.
| Item | Value |
|---|---|
| More favourable landlord tax | 36.9% |
| Lower Stamp Duty | 13.7% |
| Faster, easier possession | 12.0% |
| More confidence in the economy | 11.6% |
| Lower property prices | 9.0% |
| Lower mortgage rates | 8.2% |
The survey was taken before the Budget on 28 October. From 6 April 2027, tax on rental profits rises by four percentage points in every band, to 24%, 44% and 49%, and relief on mortgage interest rises to 24%.
The landlords hit hardest are the ones without a mortgage, because higher relief only helps if you pay interest. That is not a small group: a survey of 2,043 landlords found that 43% of landlords in England have no borrowing on their rentals. On an average let in England, rent rose by £675 over the past year. For a mortgage-free landlord, the extra tax takes back 73% of it.
| Item | Value |
|---|---|
| Mortgage-free | +£493 |
| With a 60% mortgage | +£104 |
Based on the England average rent of £1,466 a month (ONS), 30% running costs and, where mortgaged, a 60% interest-only loan at 5.5% on the £294,000 average price (HM Land Registry). The rise is four pence on each pound of profit after interest, in every tax band. Announced rates still need to pass into law.
What landlords say and what they do are not the same thing. A survey of 2,043 landlords in England, carried out in March and April 2026, asked what they had actually done over the previous 12 months.
26% had added a property and 16% had removed one. Both figures have risen in each year since the survey began in 2024, so the market is moving more, not freezing. In every year, more landlords bought than sold.
| Group | Bought and Sold |
|---|---|
| 2024 | Bought 19%Sold 13% |
| 2025 | Bought 23%Sold 14% |
| 2026 | Bought 26%Sold 16% |
Shares of landlords, not numbers of properties, so this is not a measure of net rental supply. Most landlords (58% in 2026) made no change. Fieldwork 26 March to 13 April 2026, before the Renters’ Rights Act took effect and before the Budget.
Younger landlords are buying and older landlords are selling. 55% of landlords aged 18 to 34 are looking to buy. Among those aged 65 and over it is 4%, while 27% are looking to sell. Landlords are an ageing group, so this handover will shape the rental market for years.
| Group | Looking to buy and Looking to sell |
|---|---|
| Aged 18 to 34 | Looking to buy 55%Looking to sell 34% |
| Aged 35 to 44 | Looking to buy 48%Looking to sell 31% |
| Aged 45 to 64 | Looking to buy 19%Looking to sell 18% |
| Aged 65 and over | Looking to buy 4%Looking to sell 27% |
19% of single-property landlords are looking to sell. Among those with ten or more properties it is 44%.
| Item | Value |
|---|---|
| 1 property | 19% |
| 2 to 4 properties | 26% |
| 5 to 9 properties | 36% |
| 10 or more | 44% |
Coming regulation and tax lead, but tenant behaviour is close behind.
| Item | Value |
|---|---|
| Upcoming regulatory changes | 35% |
| Changes to tax | 29% |
| Tenant behaviour | 27% |
| Market factors | 25% |
| Mortgage repayments or cost of finance | 25% |
| Past regulatory changes | 19% |
to owner-occupiers, the most common destination
back into the private rented sector, bought by another landlord
into short-term lets, up from 8% in 2024
Ordinary single lets dominate. Property that needs refurbishment comes a clear second at 18.3%: that is where strategies like buy, refurbish, refinance sit. HMOs, for all the attention they get, account for 5.5% of answers.
| Item | Value |
|---|---|
| Traditional single let | 48.2% |
| Property needing refurbishment | 18.3% |
| Holiday and short-term lets | 11.0% |
| HMO | 5.5% |
| Student accommodation | 4.3% |
| Corporate lets | 3.7% |
| New build | 3.7% |
October’s market data shows sales agreed down 7% on a year earlier, while the number of homes for sale is up 7%. Homes are taking 44 days to sell on average, from 19 days in Scotland to 56 in London. For a prepared buyer, that can mean more room to negotiate. It does not make any particular property good value.
Sales agreed and homes for sale cover the whole housing market, not just buy-to-let. Approvals are not completed purchases and exclude cash buyers. Rents from the ONS (21 October 2026), prices from HM Land Registry, mortgage figures from the Bank of England (29 October 2026).
| Item | Value |
|---|---|
| September 2024 | 65,600 |
| September 2025 | 65,900 |
| September 2026 | 53,400 |
September’s 53,400 approvals were 2.6% below August’s 54,800 and 19% below September 2025. Each figure is from that month’s first Bank of England release, and later revisions can differ.
These surveys are months old. We want to know what PROXERA readers are doing now. One click, anonymous, and we publish the results in the November edition.
Research comparing the total return on the average UK buy-to-let with shares tells two stories. Over the last five years, shares did clearly better. Over 30 years, buy-to-let turned £1 into £22.30, well ahead of the FTSE 100 and level with America’s S&P 500.
| Item | Value |
|---|---|
| US shares · S&P 500 | 75% |
| UK shares · FTSE 100 | 73% |
| UK buy-to-let | 41% |
| Item | Value |
|---|---|
| UK buy-to-let | £22.30 |
| US shares · S&P 500 | £22.05 |
| UK shares · FTSE 100 | £8.96 |
The detail that matters most: rent made up 62% of buy-to-let’s 30-year return, and rising prices 38%. Property’s long-run record was built on income. That is why the tax and mortgage changes in this report matter so much. They come straight out of the part of the return that did most of the work.
Cumulative returns, not annual yields or forecasts. The buy-to-let figures use ONS house price and rent data and include net rental income after running costs. The S&P 500 figure includes reinvested dividends. None reflects any individual’s mortgage, tax or fees, and past performance is not a guide to future returns.
The PROXERA Break-even Rate is the mortgage rate at which an average rental home in an area stops paying for itself after income tax. Borrow above it and you top the property up from your own pocket each month.
We worked it out for every council area in England and Wales, using average rents from the ONS and average prices from HM Land Registry, with 30% running costs, a 60% interest-only mortgage and the tax rules from April 2027. For a higher-rate landlord, buy-to-let costs money each month in 271 of 316 areas at today’s average new mortgage rate of 4.63%.
| Item | Value |
|---|---|
| North East | 4.92% |
| North West | 4.56% |
| London | 4.35% |
| Yorkshire and The Humber | 4.28% |
| South West | 4.24% |
| West Midlands | 4.04% |
| Wales | 4.04% |
| East of England | 3.96% |
| East Midlands | 3.96% |
| South East | 3.90% |
Bars in red fall below 4.63%, the average rate on new mortgages in September (Bank of England). Buy-to-let rates are usually higher, so the real picture is tighter.
Cities with big student and young professional rental markets lead, and one London borough makes the cut.
| # | Area | Break-even | Gross yield | Avg rent |
|---|---|---|---|---|
| 1 | Newcastle upon TyneNorth East | 5.96% | 6.9% | £1,220 |
| 2 | PortsmouthSouth East | 5.76% | 6.7% | £1,374 |
| 3 | Tower HamletsLondon | 5.67% | 6.6% | £2,462 |
| 4 | ManchesterNorth West | 5.54% | 6.4% | £1,380 |
| 5 | NottinghamEast Midlands | 5.52% | 6.4% | £1,015 |
| 6 | BristolSouth West | 5.52% | 6.4% | £1,893 |
| 7 | SouthamptonSouth East | 5.52% | 6.4% | £1,261 |
| 8 | SalfordNorth West | 5.42% | 6.3% | £1,173 |
| 9 | BlackpoolNorth West | 5.40% | 6.3% | £723 |
| 10 | LincolnEast Midlands | 5.36% | 6.2% | £947 |
| Area | Break-even | Gross yield |
|---|---|---|
| Derbyshire DalesEast Midlands | 2.50% | 2.9% |
| ElmbridgeSouth East | 2.64% | 3.1% |
| WaverleySouth East | 2.71% | 3.2% |
| PowysWales | 2.72% | 3.2% |
| Malvern HillsWest Midlands | 2.82% | 3.3% |
Type any council area in England or Wales to see its break-even rate, yield, average rent and average price.
Area averages mix property types. Your own break-even rate depends on your purchase price, rent, costs and mortgage. PROXERA works it out for each property you own.
See your own break-even rateA fair comparison looks at where the return comes from and what can go wrong, not just the headline number.
| Investment | Where the return comes from | What deserves attention |
|---|---|---|
| Property | Rent and changes in value | Repairs, empty periods, finance costs and the time it takes to sell |
| UK share funds | Dividends and share prices | Market falls, sector mix and fund fees |
| Global share funds | Company returns across countries | Currency moves, market falls and concentration |
| Bonds and gilts | Interest, and price or repayment changes | Issuer risk, interest rates and time to maturity |
| Cash savings | Interest | Inflation, changing rates and access limits |
An ISA or pension can hold any of these, so the account type alone says nothing about performance. The FTSE 100 covers large UK-listed companies, not the whole UK market. This table compares how returns are made. It does not show where investors are moving money.
53% of landlords in the spring survey said they started letting to supplement their income. A further 36% became landlords through circumstance, such as inheriting a home or being unable to sell.
Asked why they chose property over other investments, the top answers were monthly income, capital growth and owning something tangible. 38% see property as low risk.
| Item | Value |
|---|---|
| Ongoing monthly income | 47% |
| Potential capital growth | 41% |
| Property is a tangible asset | 41% |
| Property is low risk | 38% |
| Adding value through improvements | 30% |
| Diversifying their investments | 27% |
| Control over the investment | 24% |
| Item | Value |
|---|---|
| An investment for rental income | 51% |
| A long-term contribution to my pension | 47% |
| An investment for capital growth | 38% |
| A full or part-time business | 19% |
| A short-term arrangement | 7% |
Nearly half now see their rentals as part of their pension, and only 7% see them as short term. These are long-term owners, which is why a tax change that starts in 2027 matters to them today.
Only 19% of landlords see letting as a business, so 81% do not. Yet the business-minded group is ahead on the basics: regular inspections, money set aside for empty months, and knowing the new rules.
| Group | Business-minded landlords and All landlords |
|---|---|
| Inspect their properties regularly | Business-minded landlords 84%All landlords 77% |
| Have money set aside for empty periods | Business-minded landlords 74%All landlords 64% |
| Familiar with the Renters’ Rights Act | Business-minded landlords 89%All landlords 79% |
Running a rental like a business is mostly a matter of habits: knowing the numbers for each property, keeping money aside, and keeping track of dates and rules.
A 2026 survey of 1,950 tenants asked how they use AI. Almost one in four said they had used it to understand their rights, and nearly as many to understand a tenancy agreement. Letting agents see it too: 68% say tenants are using AI to draft emails and formal letters.
| Item | Value |
|---|---|
| Understanding their rights | 24% |
| Understanding a tenancy agreement | 23% |
| Finding or comparing rentals | 19% |
| Drafting letters and emails | 18% |
| Disputes | 9% |
| Appealing a rent increase | 5% |
Tenant responses, not landlord or agent adoption rates. Uses can overlap. The 68% figure comes from 429 letting agents describing what they see across tenancies.
That changes the other side of the conversation. A tenant who arrives with an AI-drafted question about a deposit, a repair or a rent increase expects a clear answer they can check. Landlords with organised records will find that easy. Those working from memory and a folder of old emails will not.
Locate a clause, a payment or a renewal date in the underlying records, in seconds rather than an evening.
Compare costs or documents, with links back to the evidence, so a question can be answered with facts.
Draft a reply or a task list for a person to check before anything is sent or signed.
These are ways technology can help any owner, not a list of PROXERA features. Accurate records, sensible privacy controls and human checks on figures and legal points still matter.
The Bank of England’s next decision, with a full Monetary Policy Report. Every move shifts how many areas clear the break-even bar.
Quarterly update due for landlords already in Making Tax Digital, covering 6 July to 5 October.
The £65 fee for England’s “Register your rental property” service applies from this date.
It is reasonable for landlords to ask whether property still deserves their money and their time. Tax on rental income is going up again, the rules are changing and running costs keep rising. For someone with one or two properties, one large repair or an empty month can undo a year’s progress.
The evidence in this report points to neither an exodus nor a boom. Most landlords are holding. A younger group is still buying and an older one is starting to sell. The buyers are mostly choosing ordinary single lets and homes they can improve.
Our view is that property still has a place when the individual investment works after its costs and risks are counted. The long-run record is real, and it was built mostly on rent. That makes the numbers on each property, not the national headline, the thing to watch. A national average cannot tell you whether your flat in Leeds or your terrace in Kent is paying you or costing you.
That is why we built the Break-even Rate. It turns a general worry about tax and interest rates into one number you can hold up against your next mortgage offer. In most of England and Wales, the average let no longer clears it for a higher-rate landlord. Plenty of individual properties still will, because of the price paid, the rent achieved or the way they are owned.
Property should be compared fairly with the alternatives too. A strong 30-year record does not guarantee the next five years, and a difficult few years does not condemn a good home in a good area. Being clear about what each investment is for, whether income, a pension or a home for family, makes the evidence easier to judge.
For PROXERA, this is the work: putting each property’s rent, costs, mortgage and value in one place, so owners can see where they stand and have a better conversation with their accountant, broker or agent. The decision might be to improve, buy, hold or sell. Whichever it is, it should be one you understand and can explain.
Check each property against its break-even rate, review how each one is held, and get ready for Making Tax Digital. Our in-house accounts team and specialists can help with all three.
Create your free accountSurveys: Benham and Reeves, ProperPR and FindOutNow (437 landlords in England, 17 August 2026); TDS Charitable Foundation, Voice of the Landlord 2026 (2,043 landlords in England, 26 March to 13 April 2026); Goodlord, State of the Lettings Industry 2026 (1,950 tenants and 429 agents).
Market data: Zoopla House Price Index, 27 October 2026; ONS, Private rent and house prices, UK: October 2026 and Price Index of Private Rents (rents to September 2026); HM Land Registry, UK House Price Index (prices to August 2026); Bank of England, Money and Credit, September 2026 and MPC dates.
Returns: Hamptons 30-year comparison, as reported by The Negotiator and Mortgage Soup, September 2026. Tax: HM Treasury and HMRC, Budget 2026: Overview of tax legislation and rates.
Each dataset is labelled with its own measurement period. Survey results describe their respondents at the time of fieldwork, not every investor’s current behaviour, and some category names have been shortened. Break-even rates and the Budget example are PROXERA calculations from official data on the basis stated. This report contains no private PROXERA customer data. General information only, not personal investment, mortgage or tax advice.
