Why Thousands of Landlords Are Struggling — And What You Can Do About It
2025 is proving to be one of the toughest years in recent memory for UK landlords. Rising interest rates, relentless regulation, and a cooling rental market are pushing even seasoned property investors to the brink.
If you’re a landlord feeling the squeeze, you’re not alone — and it’s not your fault.
Let’s explore the harsh realities landlords are facing in 2025, and more importantly, what options are available to regain control, protect your assets, and plan your next move.
🚨 The 2025 Rental Market: A Perfect Storm
- Mortgage Rate Pressure
After years of rock-bottom interest rates, landlords now face average buy-to-let mortgage rates of 5.5% to 7% — with some tracker deals rising even further. This has slashed profits for landlords with high loan-to-value (LTV) borrowing. - Section 24 Still Hurting
Landlords can no longer deduct mortgage interest from their rental income. Instead, they receive a basic rate tax credit — a disaster for higher-rate taxpayers. Many landlords are now paying tax on a loss. - EPC Rules & Compliance Costs
With EPC upgrades looming (rumoured to return in 2026), the pressure to invest thousands in energy efficiency is back on the table. For older properties, especially HMOs, compliance costs are spiralling. - Local Licensing & Anti-Landlord Sentiment
More councils are adopting selective licensing schemes. Add to that the endless paperwork, Right to Rent checks, and the risk of fines — it’s no wonder landlords feel under siege. - Renters Reform Bill (and Abolishing Section 21)
The abolition of Section 21 ‘no fault’ evictions is progressing through Parliament, changing the game for landlords managing difficult tenants. Evictions will take longer and be riskier. - Arrears, Void Periods & Market Cooling
With tenants struggling with the cost-of-living crisis, arrears are on the rise. Rental growth has slowed in many regions. Combine this with stricter affordability checks, and many landlords are experiencing higher voids and lower yields.
🧨 The Emotional Toll on Landlords
This isn’t just about numbers.
Landlords are:
- Stressed by unmanageable debt repayments
- Losing sleep over tenant issues or eviction delays
- Feeling stuck in an asset-rich, cash-poor position
- Unsure whether to hold, sell, restructure, or exit altogether
💡 So What Can You Do?
Whether you want to protect your portfolio, minimise tax, or plan your exit, there are smart solutions — if you act early.
✅ OPTION 1: Incorporate or Restructure
Many landlords are moving properties into limited companies for tax efficiency and to sidestep Section 24. This isn’t right for everyone — but done properly, it can reduce tax and support long-term planning.
Tip: Seek expert tax advice before moving anything — there are ways to structure incorporation with minimal CGT/SDLT if done correctly.
✅ OPTION 2: Review and Refinance
Lenders have become more flexible in 2025. With the right broker and structure, you may be able to remortgage, consolidate debts, or reduce your LTV to make the numbers work again.
✅ OPTION 3: Exit Gracefully (and Tax-Efficiently)
If you’re ready to sell, timing and structure matter. There may be Capital Gains Tax allowances, Principal Private Residence Relief, or even opportunities to sell SPVs instead of property (to save buyers SDLT and net more value).
✅ OPTION 4: Create a Holding Company Strategy
High-value landlords are using Holding Company + SPV structures to:
- Ringfence liabilities
- Reinvest profits across projects
- Reduce SDLT via intra-group relief
- Plan succession or legacy transfers
It’s not just for big developers — it’s for any landlord who wants control and longevity.
💬 Final Thoughts
If you’re a landlord feeling overwhelmed, underpaid, or uncertain about the future — you’re not alone. But you do have options.
At Taxpertise, we specialise in helping landlords:
- Restructure portfolios tax-efficiently
- Incorporate when appropriate
- Plan exit strategies that don’t cost the earth
- Use holding companies and trusts to protect wealth
