A changing buy-to-let landscape
By Rhys Powell, Head of Distribution, Bank of Ireland for Intermediaries
We’re seeing a period of adjustment for the buy-to-let market, rather than a decline. For brokers and landlords, the backdrop is more balanced than it has been for some time, but it remains shaped by pressures on supply, shifting demand and ongoing regulatory change.
A recent Zoopla report shows rental growth has slowed to 1.9% year-on-year, down from 2.8% previously, as affordability constraints begin to take hold [1]. Demand has also eased slightly, falling 14% compared to a year ago, while the number of homes available to rent has risen by 11%. This has reduced competition a little, with enquiries per property dropping to 4.8, the lowest level in six years [1].
At first glance this may seem slightly concerning but it is still a market which weighs heavily in landlord investors favour. Supply, for instance, remains 23% below pre-pandemic levels, which means the market is still undersupplied overall. As a result, rents are rising, just at a slower pace, with rents accounting for around a third of average earnings outside London [1].
Meanwhile, Pegasus Insight data highlights a more structural shift in the private rental sector (PRS) itself, which again may offer advantages for those still invested and still active in the PRS.
Landlords are in some cases selling property, and while others are leaving the sector, 30% are bought by other investors. The rest is split predominantly between first-time buyers (34%), and a further 29% by other owner-occupiers [2]. This points to some contraction in rental stock which again should feed into ongoing rent increases and yield growth.
A new perspective
Changes in landlord behaviour have been prompted by tax changes, higher borrowing costs and regulatory requirements, particularly among smaller investors. The sector still houses around 20% of UK households, underlining its importance in the UK [2].
The recent delay to Energy Performance Certificate reform, pushing changes into the second half of 2027 provides more time for landlords to plan, but also extends uncertainty around future energy-efficiency standards [3]. The deadline for Minimum Energy Efficiency Standards remains set for 2030, meaning landlords still face the need to invest in property upgrades over the medium term and may need the finance to do so.
Remortgage pressure and affordability levers
Meanwhile, and importantly for advisers, many landlords are reaching the end of fixed-rate deals secured in a lower-rate environment and may currently be facing higher borrowing costs. In these cases, brokers will be able to help landlords with different case structuring options and maintain comfortable lending limits for the borrower.
Interest Cover Ratio assessments remain a core route for many cases, particularly where landlords elect to rely solely on rental income. Using a threshold of 145% of the stressed interest payment, this approach supports cases where yields are strong, and income is consistent.
For others, particularly landlords with higher personal income, top slicing provides an alternative. Combining rental income with personal income can help bridge affordability gaps where rental yield alone falls short. This often works well for landlords investing in areas with lower yields but stronger, long-term capital growth prospects.
Like-for-like remortgages also have a key role to play, when landlords keep the same loan amount. When the borrower’s objective is a term-end lender switch, we support these cases with a simplified rental assessment, helping customers in a higher rate environment. These are not new strategies, but they’ve become more useful to provide the ways and means by which landlords can meet their affordability responsibilities.
Outlook for 2026
The buy-to-let market in 2026 will see a gradual rebalancing rather than rapid change. The exit of some landlords, combined with regulatory pressure, means the overall level of rental stock is unlikely to meet tenant demand.
For committed landlords, this is still a strong environment to invest in. For brokers, the role remains centred on navigating complexity. If you know how to structure affordability, when to use rental-only assessments, and where personal income can support a case, that will be key to maintaining momentum in a more constrained market.
Notes
[1] Zoopla Rental Market Report, March 2026: https://www.zoopla.co.uk/discover/property-market/rental-market-report/
[2] Pegasus Insight, Landlord Trends Q4 2025: https://theintermediary.co.uk/2026/03/landlord-sales-continue-to-reduce-rental-supply-despite-some-stock-remaining-in-sector
[3] NRLA commentary on EPC reform delay, March 2026: https://www.nrla.org.uk/news/epc-c-now-ahead-game
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