Homeowners are rejecting tax increases as a buy-to-let ratio for the higher end of the market
Landlords appear to be ignoring the government’s recent tax hike, according to new data which suggests that buy-to-let investors are now accounting for a larger share of property purchases than before the Chancellor’s latest changes.
The analysis, carried out by housing agency Hamptons with transaction data from its parent company, Countrywide, shows that landlords were responsible for 10.7% of admissions in Great Britain this November—from the 2024 average to now -10.2%. The findings challenge warnings that the new stamp duty penalty will prevent investors from expanding their portfolios.
Chancellor Rachel Reeves’ autumn statement last month increased stamp duty on second home and buy-to-let purchases by 2% to 5%. This means that an investor buying a £500,000 property now faces an additional tax bill of £37,500, an increase of £10,000 on the previous rate.
Industry groups fear the move will cause a sharp drop in buy-to-let activity, driving up Britain’s rental housing glut. However, so far, the response from homeowners has not matched those dire predictions.
“Early signs suggest new homeowners are bracing for further cost increases,” said Aneisha Beveridge, head of research at Hamptons. “Although the number of purchases remains muted by historical standards, their numbers have not decreased.”
The latest figures contradict a long-term trend of declining buy-to-let participation since a wave of tax changes aimed at landlords began in 2016. Back in 2015, private investors snapped up 16% of all UK properties. According to Hamptons, that number is now down significantly and is likely to end the year with about 113,630 new purchase deals—40% less than eight years ago.
However, the strength of this sector is evident in various regions. In the affordable North East, homeowners accounted for 18.4% of purchases in November. Yet London, which is often considered a difficult market for landlords due to high prices and low rental yields, still saw 14.7% of its transactions by property investors.
Meanwhile, rising rental costs—an increasing burden on British employers in recent years—appear to be moderating. Average rent growth fell to 2.6% year-on-year in November, bringing the average monthly rent across Britain to £1,382. This faster pace is a relief to employers, who have faced a huge increase following the pandemic.
The National Residential Landlords Association (NRLA) says the decline in landlords since 2016 has contributed to the tenant crisis. The group points to official data showing 7,130 families needing council support due to homelessness between April and June 2024—an increase from 5,400 between October and December 2023.
For now, the market’s initial response to the recent tax hike suggests that homeowners, although more selective in their purchases, are not willing to exit the sector in droves. Rather, they appear to be restructuring strategies, targeting areas where yields remain attractive and taking on more tax burdens than abandoning the buy-to-let market altogether.
