Landlords appear to be ignoring the government’s latest tax increases, with new data showing that rental investors now account for a larger share of property purchases than before the Chancellor’s recent reforms.
The analysis, carried out by estate agent Hamptons using transaction data from parent company Countrywide, shows that landlords were responsible for 10.7% of accepted offers in Britain in November – up from the average of 10.2% in 2024. These findings refute warnings that new stamp duty surcharges would deter investors from expanding their portfolios.
Chancellor Rachel Reeves’ autumn statement last month increased the stamp duty surcharge levied on purchases of second homes and buy-to-let by two percentage points to 5%. This means that an investor buying a €500,000 property will now have to pay an additional tax bill of €37,500, an increase of €10,000 on the previous rate.
Industry groups feared the move would trigger a dramatic drop in buy-to-let activity, further restricting Britain’s already limited supply of rental properties. Yet landlords’ response so far has not matched those gloomy predictions.
“Early signs suggest that new landlords have shown relative resilience to yet another cost increase,” said Aneisha Beveridge, head of research at Hamptons. “While the number of buy-to-let purchases remains subdued by historical standards, their numbers have not collapsed.”
The latest figures contrast with the long-term trend of shrinkage buy to rent participation since a wave of tax reforms against landlords began in 2016. In 2015, private investors seized 16% of all UK properties. According to Hamptons, that figure is now significantly lower and the year is likely to end at around 113,630 new buy-to-let deals – 40% fewer than eight years ago.
Yet the resilience of the sector is visible in various regions. In the more affordable Northeast, landlords accounted for 18.4% of purchases in November. Yet London was often seen as a difficult market for landlords due to high prices and lower rental yields, with 14.7% of transactions still made by property investors.
Meanwhile, rising rental costs – an increasing burden on British tenants in recent years – appear to be easing. Average rental growth slowed to 2.6% year-on-year in November, bringing the average monthly rent in Britain to £1,382. This steadier pace provides some relief for renters, who have faced steep increases following the pandemic.
The National Residential Landlords Association (NRLA) says a decline in the number of landlords since 2016 has contributed to tenants’ problems. The group points to official data showing that 7,130 households required council support for homelessness between April and June 2024 – up from 5,400 between October and December 2023.
For now, the market’s initial reaction to the latest tax increase suggests that landlords, while being more selective in their purchases, are unwilling to leave the sector en masse. Instead, they appear to be recalibrating strategies, focusing on areas where returns remain attractive and absorbing the additional tax burden, rather than abandoning the buy-to-let market altogether.