Is Buy-to-Let Worth it in 2025?

Is a buy-to-let property a good investment this year? If you’re a landlord in the UK looking to diversify your portfolio, you’ve likely considered buy-to-let properties.

Although known for their advantages, like providing a steady income, are buy-to-let property investments really a worthy choice? To learn more about whether or not buy-to-let properties seem worth it in 2025, continue reading.

What is Buy-to-Let?

Buy-to-let refers to the process of buying a property for the main purpose of renting it out to tenants.

Landlords with buy-to-let properties often make a steady stream of income through rental payments, making it a desirable choice for both aspiring and existing landlords across the country. However, as mentioned – are buy-to-let properties really worth getting into in 2025? For many, the legal aspects and overall responsibility of managing buy-to-let properties create some drawbacks.

Key Changes to Buy-to-Let

Over the past couple of years, many landlords have been left thinking about whether buy-to-let is worth it or not. These major changes have made it difficult for landlords to consider buy-to-let properties as a safe investment.

Let’s find out what’s changed:

For the 2025 tax year, landlords will have to pay 20% tax on buy-to-let income that’s between the amounts of £12,571 and £50,270
Those with second properties in the UK must now pay a stamp duty surcharge – as of October last year, the surcharge was increased to 5%
The stamp duty threshold will decrease in April 2025, meaning that buying properties before April 1st will help you save money
Landlords are now no longer able to deduct mortgage interest prior to paying tax and instead will be given a flat-rate tax credit based on 20% of the interest on their mortgage
The new government has introduced the Renter’s Rights Bill, meaning if passed, the rights of both landlords and tenants could change

Seeking expert advice from financial experts is best before planning on considering buy-to-let properties. Ultimately, knowing whether buy to let is worth getting into in 2025 comes down to finances.

Staying informed on upcoming changes and regulations will help you better weigh up whether buy-to-let properties are going to be a worthwhile investment this year.

Will Buy-to-Let Profits Change?

Yes, buy-to-let profits will change – they will likely decrease due to tax changes.

This is something to be aware of while you decide whether a buy-to-let property is a good investment. As discussed, several key changes have taken place recently, which have had a huge impact on profits made from buy-to-let properties, as well as leaving most landlords with more financial burden.

Buy-to-Let: The Pros and Cons

Despite the recent changes, there are some advantages to buy-to-let properties. It’s important not to focus directly on the potential negatives but to weigh up the pros and cons instead:

Pros

Potential for capital appreciation
Rent is set to rise
Steady rental income in the right locations
Portfolio diversification
Reduced chance of risks if insurance coverage is taken out

Cons

Increased costs (including taxes)
Capital could be reduced if property prices end up falling
Increased responsibility
Potential management challenges
Possibility for rental voids

While it’s obvious that buy-to-let investing has become slightly more challenging in recent times, there’s still potential for a steady income – especially with properties in the right areas.

5 Top Tips on Buy-to-Let in 2025

Let’s take a look at some of our top tips for investing in buy-to-let properties in 2025.

Understand the Costs

Having full knowledge of the costs surrounding buy-to-let properties is vital. As a landlord, you’ll face a range of costs – some that you may not be expecting. However, being aware of the costs that you know will affect you most is key:

Your interest-only mortgage payments
Stamp duty cost
Additional tax payments
Profit losses
Insurance
Property repairs
Maintenance costs
Letting agent fees
Advertising fees

Focus on the Right Locations

Many landlords purchase properties in their local area, thinking that being close to the property itself will be more beneficial. However, this isn’t always the case. Many buy-to-let properties perform better in high-yield areas, allowing for an easier process of finding tenants, and a steady stream of profitable rental income.

Diversify Your Current Portfolio

Diversifying your investment portfolio is important. By doing so, you have the potential to gain an ongoing stream of income alongside the rest of your investments.

Integrating buy-to-let properties within your existing investment portfolio will likely bring in good returns and balance out any possible issues occurring with the rest of your assets. Overall, buy-to-let properties are a stabilising asset, allowing for a diverse portfolio.

Consider Renovations

Renovations typically bring in higher rent, likely bringing the property value to a higher price bracket. By improving your buy-to-let properties, you attract longer-term tenants and can address issues promptly instead of waiting and delaying much-needed repairs.

Plan for Periods Without Tenants

Planning for rental voids is essential. Being a landlord comes with its hardships, and periods of no occupancy are certainly one of them. Thinking ahead to remain financially stable through difficult periods and minimise losses as much as you can is important.

Whether it means setting aside a percentage of rental income per month as an emergency fund or offering lease terms to ensure tenants are occupying your properties during off-peak times, financial planning is a key part of surviving through potential periods without tenants.

So, is Buy-to-Let Worthwhile?

Yes, buy-to-let is still worthwhile in 2025, although it has the potential to come with some challenges.

There are several key factors to consider before getting into buy-to-let this year – we’ve rounded them up to ensure you can make the most informed decision with your investments.

Key Takeaways

There’s believed to be another spike in rental prices in 2025
Demand for rental properties remains high, creating promising opportunities for landlords
House prices will likely rise, potentially resulting in capital appreciation
The stamp duty surcharge has increased to 5% for buy-to-let properties
The sector faces some major changes
There’s more tax burden for landlords in recent years
Profitability will differ depending on the location

Expert Assistance in Property Investments

Are you ready to kickstart your journey in property investment? If so, we can help. At Peninsular Property, we work with a diverse clientele – including investors. Buy-to-let investment properties are some of the most reliable (and profitable!) investments.

We understand investing can seem daunting, but we’re here to assist you throughout the process. We can help you better understand property investment, allowing you to choose the best type of rental property to put your money into – whether it be buy-to-let or else.

To discuss our services further, please don’t hesitate to get in touch with us today, or fill out our contact form here.

Joe Martin-Bindley

Joe is the founder of Peninsular Property and has worked in the industry since 2005. Joe has negotiated on over 9 million pounds worth of property purchases and managed over 1000 properties for clients all over the world. Joe is a landlord himself with a varied property portfolio so is ideally placed to advise clients on their property purchases and investments.