The Private Rented Sector (PRS) is a cornerstone of the English housing system, with approximately 19% of households relying on it for their homes (UK Government, 2023a). Within this sector, Buy-to-Let (BTL) investors are crucial, with over half (57%) of landlords financing their PRS investments through BTL mortgages (MHCLG, 2022). These investors play a pivotal role in ensuring the sector's success and sustainability.

However, recent changes have made the investment environment increasingly challenging. Inflation, driven by the cost-of-living crisis, has led to a significant rise in landlord business costs. Compounding this, legislative and tax reforms have altered the risk-return profile for many investors.

One major factor is the series of base rate increases aimed at tackling inflation, which have caused substantial hikes in BTL mortgage interest rates. Additionally, the phased removal of mortgage interest rate relief under Section 24 of the Finance (No2) Act 2015 has resulted in many landlords facing higher tax liabilities.

For a comprehensive analysis of these developments and their impact on the PRS, please refer to the full report from Propertymark here.

Stay informed and adapt your investment strategies to navigate these evolving challenges in the BTL market.