The UK Buy-to-Let market is changing but still holds a wealth of opportunities for investors

This editorial was originally published in Industry Voice.

Near the beginning of this year, property professionals may have had limited confidence in the UK’s Buy-to-Let (BTL) market, instead favouring the first-time buyers’ market or those looking to purchase a new build property.[1] At the time, this was understandable due to uncertainty surrounding the impact of key regulatory changes, including updates to stamp duty thresholds and the impending Renters’ Rights Bill. However, figures released by UK Finance recently showed that in Q1, there was a 38.6% increase in new Buy-to-Let financing in the UK, compared with the same quarter in 2024.[2]

Additionally, a recent market update from Savills provided more reasons for homeowners and landlords to be optimistic, forecasting UK house prices to rise by 24.5% over the next five years, with rental prices also seeing an increase of 17.6%.[3] [4] These rises are likely linked to the high demand for properties in the UK and, while it is important that we support efforts to better meet customer demand, it is equally valuable to inform prospective investors of the important role they have to play in increasing the supply of rental homes available.

It’s clear that despite an initial dip in confidence and a need for a well-balanced and responsive approach to the demands of the housing sector, the UK’s BTL market is experiencing a period of growth, not contraction. There is still a wealth of opportunities on offer for investors, whether they reside in the UK or overseas, as the market shifts and changes to adapt to current economic and regulatory conditions as well as evolving consumer needs.

While change in economic markets is something that we can always rely upon, so is the UK’s reputation as a strong, stable and attractive environment to purchase property. As well as the ability to yield consistently high returns on investment, the strong laws and policies in place within the UK are particularly enticing. This is especially true for overseas investors, with one specific draw in English property law being the ability to deduct tax from some expenses such as property management fees, maintenance and insurance.

The wide range of investment properties on offer provides another reason for the UK market’s attractiveness, which allows each individual investor to find something that best suits their goals. For many, this continues to be within the metropolitan capital, London, however, an increasing number of investors are turning their attention to other up-and-coming cities such as Manchester, Liverpool and Birmingham. This is largely due to elevated demand from young professionals and students, as well as an increase in modern developments.

This is a trend we are seeing within our own customer base too. Of our clients residing in the United Arab Emirates, just over a quarter (28%) have chosen to invest in the North West and a further 20% in the West Midlands. In contrast, just 15% of these investors have chosen to invest in property in London. With the North East and North West seeing the highest increase in rental yields in England during the first quarter of this year, it’s no surprise that these regions are becoming a more popular choice. [5]

There is no question that the UK Buy-to-Let market has been undergoing a period of change which has come with a degree of uncertainty and fluctuating confidence. However, we know that change is no new experience within global financial environments. And, for those willing to move and adapt with it, it’s clear there remain many reasons why the market is a solid option for those looking to invest, with Gatehouse Bank and other financial providers on hand to help and support investors throughout this period.

[1] Property Wire, Confidence in UK buy-to-let limited

[2] UK Finance, Buy-to-Let Lending

[3] The Intermediary, House prices to rise 24.5% by 2029, predicts Savills

[4] Property Investor Today, Savills predicts long-term rent rises as landlords quit sector

[5] Fleet Mortgages, Rental Barometer Q1 2025