"The proposed stamp duty increase, combined with mounting regulations and rising costs, are pushing many landlords to the brink. The entire sector is under immense financial strain, and our data suggests this is just the beginning."
- Haaris Ahmed, founder and MD of UOWN
A rise in stamp duty from April, coupled with existing challenges, could mark the breaking point for many buy-to-let landlords, leading to an exodus from the UK property market, a new report has warned.
Property investment platform UOWN's report shows that 83% of all housing transactions will incur stamp duty from April - up 34% on the current thresholds.
The report reveals that first-time buyers will be less affected, with only 40% of their transactions subject to tax, compared to 20% under existing rules.
For landlords, the stamp duty surcharge increase from 3% to 5% for second homes and buy-to-let properties from April 2025 will place an additional financial burden on an already stretched market.
Based on the average price of a buy-to-let home across Britain, stamp duty bills are set to nearly double in April, rising from £8,452 to £16,190 - an increase that could drive up rental prices as landlords seek to offset their expenses.
The report finds the main causes of Britain’s buy-to-let exodus are rising borrowing costs, increasing insurance premiums and, more recently, stricter regulations like the EPC reforms. UOWN notes that the UK government’s phased removal of mortgage interest tax relief has already dealt a heavy blow to landlord profitability, further compounding the issue.
If this trend continues, the UK could face a severe shortage of rental properties, making it even harder for tenants to secure affordable housing.
The report has laid bare the growing imbalance between rental supply and demand across the UK. Even if demand stabilises in 2025, UOWN reports that more landlords are selling their properties (+37% in December, up from +29% in November), further shrinking the rental stock.
Although there are signs that demand may be leveling off, UK rents are still expected to rise by 17.6% over the next five years, primarily due to landlords exiting the market. This trend is shrinking supply and intensifying competition for available homes.
While the overall trend across the country shows a price slowdown after years of unprecedented growth, with rents now 4.7% higher than a year ago - the slowest rate of increase since 2021 - UOWN warns that an exodus of landlords could jeopardize this progress.
Haaris Ahmed, founder and MD of UOWN, commented: “The proposed stamp duty increase, combined with mounting regulations and rising costs, are pushing many landlords to the brink. The entire sector is under immense financial strain, and our data suggests this is just the beginning.
"The UK rental market is already under severe pressure, and the last thing tenants need is more landlords being forced to sell. This will not only drive up rental prices but also create instability, leaving tenants facing the stress and disruption of having to move.
"With more landlords exiting the market on the back of the latest stamp duty rise and demand remaining high, the imbalance between supply and demand will continue to push rents higher. Urgent action is needed to prevent a worsening crisis. The good news is that innovative solutions like Build-to-Rent (BTR) are helping to bridge the gap, meeting the growing demand for rental homes and ensuring long-term market stability. With over one million extra rental homes needed by 2031, BTR is playing a crucial role in filling this shortfall."
