The headlines about landlords leaving the private rental sector have been hard to miss. Tax changes, rising rates, tighter regulation: if you believed everything you read, you’d think buy to let in 2026 was a strategy best left in the past. The reality is more nuanced than that. Yes, the market has changed significantly. But for investors who understand how those changes work and how to structure their purchases accordingly, buy to let in 2026 remains a viable and potentially lucrative long-term strategy. The key is knowing what the landscape actually looks like now, and how to fund a purchase properly within it.

This guide breaks down the current state of the buy-to-let market, what landlords need to know about structure and taxation, and why the route to funding looks different in 2026 than it did even three or four years ago.

Has Buy to Let Become Less Attractive?

The honest answer is: it depends entirely on who you are and how you’re approaching it.

For smaller, individual landlords who bought years ago on the assumption that mortgage interest would always be fully tax deductible, the changes since Section 24 of the Finance (No. 2) Act 2015 took full effect have been genuinely painful. Under the current regime for individual landlords, mortgage interest is no longer deductible from rental income when calculating taxable profit. Instead, a 20% tax credit is applied. For higher-rate and additional-rate taxpayers, that’s a significant shift that erodes yields and, in some cases, makes properties that were profitable on paper look very different once tax is accounted for.

Add in the stamp duty surcharge on additional residential purchases, rising mortgage rates compared to the low-rate environment of 2020 to 2022, and the regulatory changes introduced by the Renters’ Rights Act, and it becomes clear why many smaller or accidental landlords have been selling up.

But here’s the other side of that story: when smaller landlords exit, they create opportunity. Rental demand in the UK is not declining. The housing shortage is not going away. With supply contracting and demand remaining strong, rental yields in many markets have been rising, and institutional and professional investors are taking notice. Savills has forecast average annual total returns of 7.8% in the prime property sector, and limited company formations among landlords are running at record levels, with 5,922 new landlord companies registered in January 2026 alone, up 11% on the same month the previous year.

The market isn’t dying. It’s professionalising. And that’s a crucial distinction.

Limited Company Structures: Why So Many Landlords Are Making the Switch

Limited company structures now account for 43% of all buy-to-let transactions, and the trend shows no sign of slowing. The reason is straightforward: unlike individual landlords, limited companies can still deduct 100% of mortgage interest as a business expense before calculating profit, restoring much of the tax efficiency that Section 24 removed for personal-name investors.

The most common vehicle is a Special Purpose Vehicle, or SPV, a limited company set up specifically to hold property rather than to trade. In 2025, a record 66,587 new buy-to-let companies were established in the UK, beating the previous high of 61,517 in 2024. That trajectory is continuing into 2026 as more landlords restructure existing portfolios and new investors start with the right vehicle from the outset.

The tax case for limited company ownership is compelling for higher-rate taxpayers, but it isn’t automatically the right answer for every investor. Limited company BTL mortgage rates currently run 0.3% to 0.7% higher than equivalent personal-name products, reflecting the additional complexity for lenders. There are also more costs involved: accountancy fees, corporation tax filing, and potentially capital gains tax and stamp duty if you’re transferring personally held properties into a company rather than buying new through the company.

For most investors, the most practical approach is to retain existing personally held properties and purchase all future acquisitions through a limited company, avoiding the CGT and stamp duty costs of incorporating existing stock while ensuring all new leveraged purchases benefit from the more favourable tax treatment.

Getting this decision right before you buy, not after, is where a specialist broker adds real value.

What Do Lenders Actually Look At on a Buy-to-Let Application?

This is where many first-time landlords and some experienced investors get caught out. Buy-to-let lending is assessed differently from residential mortgage lending, and the criteria have tightened considerably over the past few years.

Rental income coverage. Lenders use what’s called an Interest Coverage Ratio, or ICR, to assess whether the rental income generated by the property sufficiently covers the mortgage payment. Most lenders currently require rental income to cover 125% to 145% of the monthly interest payment, stress-tested at a rate higher than the actual mortgage rate. On a property with a thin yield, this can mean borrowing less than expected or providing a larger deposit to bring the loan down to a level the rent will cover.

Deposit requirements. Most buy-to-let lenders require a minimum of 25% deposit, and some lenders offering limited company products require more. Some specialist lenders offer 15% deposit, but rates will be higher. Coming in with a larger deposit generally unlocks better rates and more lender options.

Your income and background. Even though buy-to-let lending is primarily assessed on the rental income of the property, most lenders still want to see a minimum personal income, typically £25,000, from the borrower. For limited company applications, lenders will also assess the directors’ backgrounds and, in most cases, require a personal guarantee.

The property itself. Lenders assess the property type, condition, and lettability. Non-standard construction, short leases, and properties in poor condition can limit the lender panel considerably, which is where a specialist broker becomes essential.

Why the High Street Isn’t Always the Answer

It’s tempting to go to the lender you already have a relationship with. But the buy-to-let mortgage market is significantly broader and more varied than most borrowers realise, and many of the most competitive products, particularly for limited company purchases, HMOs, or properties that fall outside standard construction, simply aren’t available on the high street.

Specialist lenders assess cases differently. They’re more likely to accept complex income structures, look past a single quirk in a property’s profile, or offer products specifically designed for the kind of purchase a portfolio landlord is making. The trade-off is that rates can be slightly higher, but the difference between a high street lender that says no and a specialist lender that says yes at a reasonable rate is not a small thing.

A whole-of-market broker working in the specialist lending space knows which lenders are currently competitive, which are moving quickly, and which have tightened their criteria recently. That knowledge is the difference between a well-structured purchase and one that either falls through or gets funded in a way that costs more than it needed to.

Buy to Let in 2026: The Bottom Line

Buy to let in 2026 is not a strategy for the complacent. The days of buying almost anything, letting it out, and watching the mortgage interest offset most of the tax liability are gone for individual investors. But for landlords who approach it with the right structure, the right lender, and a clear view of how the numbers actually work, the fundamentals remain solid: strong rental demand, rising yields in key markets, and a contracting supply of rental stock creating opportunity for those positioned to take it.

If you’re a new investor considering your first buy-to-let purchase, the time to think about structure is now, before you’ve committed to a property and a vehicle that might not serve you well as the portfolio grows. If you’re an experienced landlord whose existing portfolio was funded and structured in a different market environment, a review of how each property is held and financed is well worth the conversation.

At GMSL, we work with landlords at both ends of the spectrum, from a first purchase all the way through to complex multi-property portfolios, and we’re whole-of-market, which means the advice starts with what’s right for the client, not what a single lender happens to offer.

If you’d like to talk through a purchase or review your existing position, get in touch.