The Intermediary – August 2025 - Flipbook - Page 31
BUY-TO-LET
Opinion
A consolidation
is gradually
taking place
I
t’s hard to overstate just
how much the UK’s rental
landscape has shied since
the invention of the buy-to-let
(BTL) mortgage in the mid1990s. Before this, being a
landlord was only really reserved for
those with the deepest pockets. But the
arrival of buy-to-let finance opened
the door to a new breed of middle-class
investor, who drove the growth in the
number of rented homes for the next
two decades.
But the rapid expansion of buy-tolet was never going to be without its
challenges. By 2016, policymakers
were becoming increasingly uneasy
that investors were crowding out
first-time buyers. A host of tax rises
were introduced – higher Stamp Duty
rates and less generous mortgage
interest relief – designed to level the
playing field.
Shifting landscape
The landscape shied again in 2022,
as rising interest rates piled pressure
on landlords’ finances, prompting
a rethink of whether property
investment still stacks up.
Since then, there has been an
explosion in the number of companies
set up to hold buy-to-let property.
Today, there are around 400,000
companies set up to hold property, and
around three-quarters of new investor
purchases now go into a limited
company. Yet, it’s worth noting
that most privately rented homes
are still held in personal names – a
reminder that change, while rapid, is
rarely absolute.
This corporate shi has also had
the effect of opening up the market to
non-UK investors. Tax rules tend to be
lighter touch for UK-based companies,
and there are oen more favourable
finance options available for domestic
companies than for international
investors who purchase property in
their own name. This has opened the
door to an increasing number of nonUK national investors – both those
living in the UK and those investing
from afar.
Since 2016, the share of newly
incorporated buy-to-let companies
with at least one non-UK shareholder
has climbed from 13% to 20% in 2025.
This is a trend that has occurred
in nine of the last 10 years. This
year alone, some 67,000 new buyto-let companies are expected to
be established, with about 13,500
estimated to be owned, at least in part,
by non-UK nationals.
But it’s not just the numbers that
are changing – it’s the faces, too. In
line with wider post-Brexit migration
trends, the dominance of EU nationals
among new buy-to-let shareholders
has fallen from 65% in 2016 to 49% in
2025. There has also been a decline in
shareholders from English-speaking
countries, or the ‘Anglosphere’. Only
Irish nationals remain in the top 10 in
2025, compared to a list that included
Americans, South Africans, and
Australians back in 2016.
In their place, investors from South
Asia and Africa have emerged as the
dominant force. Indian nationals
have been the largest group of nonUK shareholders every year since
2023, founding 684 new buy-to-let
companies in the first half of 2025
alone. Nigerians aren’t far behind,
with 647 new companies set up in the
same period.
At the centre
London, predictably, remains the
epicentre of international investment
– 27% of new buy-to-let companies in
the capital have non-UK shareholders
this year. But the real growth in
DAVID FELL
is lead analyst at Hamptons
Investors from
South Asia and Africa
have emerged as the
dominant force. Indian
nationals have been the
largest group of non-UK
shareholders every year
since 2023, founding 684
new buy-to-let companies
in the first half of 2025”
foreign ownership is happening
elsewhere. The share of new non-UK
national landlords has more than
doubled in the East Midlands, West
Midlands, and Scotland between 2016
and 2025.
So, what does all this mean for the
future? The profile of the UK landlord
is evolving – by age, by origin, and by
ambition. With the average landlord
now in their 60s, and the hurdles to
homeownership higher than ever, it’s
clear that younger generations are less
likely to follow in their footsteps.
Rather, a consolidation is gradually
taking place – fewer landlords, but
with larger portfolios – driven in
part by the Government’s desire to
professionalise the sector. However,
this isn’t just a domestic story: as local
appetite wanes, overseas investors are
increasingly stepping in. ●
August 2025 | The Intermediary
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