Is Property Even Worth It Right Now? The Renters' Rights Act Forces the Question
The Renters' Rights Act is accelerating a landlord exodus. But is that an opportunity? A property investor's honest case for watching, not buying, yet.
Everyone's telling landlords to panic about the Renters' Rights Act. I want to ask a different question: should you be in residential property at all right now?
I watch property markets closely, domestic and global, alongside wider economic conditions, taxation policy and the cost of labour and materials. I have done for years. And I still can't make a compelling financial case for investing in UK residential property at this moment. Not with conviction. The numbers are hard to stack. The tax environment remains punishing. And the costs of running a portfolio have quietly become brutal.
But here's what I find genuinely interesting about the Renters' Rights Act, it may be accelerating exactly the kind of market clearing event that historically precedes a real opportunity. The amateur landlords are leaving. The question is whether by the time the dust settles the entry conditions will actually make sense. Let me walk through my thinking.
The Tax Case Against Property Laid Bare
If you are a higher rate taxpayer considering buy to let start with the tax stack and work backwards.
Stamp Duty: Since October 2024, purchasing an additional property attracts a 5% surcharge on top of standard rates up from 3%. On a £300,000 buy to let, you're paying around £17,500 before you own a single brick. That's a significant chunk of capital locked into a sunk cost from day one and it meaningfully extends the time before you break even.
Section 24: The mortgage interest relief change that came into full effect in 2020 remains arguably the single biggest structural change to buy to let economics. Higher and additional rate taxpayers can no longer deduct mortgage interest against rental income. Instead they receive a basic rate (20%) tax credit. For a higher rate taxpayer with a mortgaged property this alone can turn a nominally profitable investment into one that is loss making on a cash basis particularly as interest rates have remained elevated.
Capital Gains Tax: If and when you come to sell and you own the property in your personal name the annual exemption has been cut to just £3,000. The government has made its intent clear: property profits are in the crosshairs.
Taken together this is not a peripheral concern it is a fundamental structural shift in the economics of leveraged residential property investment. The tax environment that made buy to let attractive for a generation of investors does not exist in the same form anymore.
The Cost Problem Nobody Is Talking About Enough
Beyond tax the operating cost story is one I keep coming back to.
Construction sector output prices are running at around 2.7% year-on-year as of autumn 2025, but the BCIS General Building Cost Index was showing 4.4% annual inflation as recently as October 2025. Skilled trade wages have been running ahead of that: electricians saw pay rises of 7% in 2024 and 5% in 2025. Building costs are forecast to rise a further 15% over the next five years according to BCIS projections.
Added to this:
Around 25–30% of UK construction workers are over 50.
The CITB estimates the industry needs ~225,000 additional workers by 2027 to meet demand.
Between 2020 and 2023, construction materials inflation was extreme. According to ONS data:
Steel products: up over 50%
Timber: peaked 70%+ higher
Concrete products: up 20–30%
Prices cooled afterwards, but they did not return to pre-Covid levels.
What does this mean in practice? The cost of maintaining a property to the standard now legally required and shortly mandated under the Decent Homes Standard extension is materially higher than it was five years ago and is not coming down. For anyone with an older stock of properties, or properties that need upgrading to meet EPC or habitability requirements, this is a real and ongoing liability, not a one off event.
Void periods, letting agent fees, insurance, compliance costs, net yields are being compressed from multiple directions simultaneously.
The Yield Reality Check
Gross rental yields in the UK currently average somewhere between 5.6% and 7%, depending on location and methodology. The headline figures look reasonable. But strip out mortgage costs at current rates, management fees, maintenance, voids, insurance and the tax treatment described above and net yields for a mortgaged higher rate taxpayer can compress to 2–4% in many markets or below zero in others.
Compare that to what a cash ISA or a well constructed investment portfolio can now return with far less friction, no tenants, no boilers breaking in December and full liquidity. The risk adjusted comparison has shifted significantly against residential property and I think many investors haven't fully updated their assumptions to reflect the world as it now is.
This isn't to say property can't work. It clearly can in the right locations, at the right entry price, held for the long term, with a portfolio large enough that fixed costs are spread efficiently. But the casual "bricks and mortar is always a solid investment" narrative deserves real scrutiny in 2026.
So Why Am I Watching? The Landlord Exodus Argument
Here is where I find myself genuinely interested even while remaining sceptical.
A record 26% of landlords sold at least some of their rental properties in Q4 2024 according to the National Residential Landlords Association. The Renters' Rights Act coming into force on 1 May 2026 is likely to accelerate that trend. Around 45% of private landlords in England own just a single property representing 21% of all private tenancies according to the English Private Landlord Survey 2024. Approximately 30% of UK landlords are so called "accidental landlords", people who ended up in property through inheritance, relocation, or circumstance rather than deliberate investment strategy.
These are the sellers. And when motivated sellers arrive in volume prices on certain property types in certain markets start to soften. That is historically how entry opportunities emerge. Not when everyone is bullish but when the less committed are forced or frightened out.
The question I'm sitting with is at what point does the combination of price adjustment, yield improvement and possibly some reversal of the tax burden create a window where the numbers genuinely work again? I don't think we are there yet. But I think we may be moving towards it and I'd rather be watching carefully than dismissing the asset class entirely.
What I Would Need to See Before I'd Say Yes
For anyone asking me directly whether to invest in residential property right now my honest answer is not yet. Here is what would change my thinking.
A meaningful price correction in target markets. Compressed yields are partly a price problem. If property values fall in areas where rental demand is structural and sustainable the entry maths improve.
Tax relief or at least stability. Section 24 is baked in but further changes to CGT, SDLT or the treatment of property income for investors could shift the picture. I'm not holding my breath but a change of government or genuine political pressure to rebuild the private rented sector could reopen the conversation.
Cost plateauing. Construction and maintenance costs have been running hot. If they stabilise or ease possible as the post pandemic supply shock continues to unwind the ongoing cost burden of holding and maintaining stock becomes more manageable.
Specific deals not broad market exposure. If there are forced sales, estate in distress situations, or motivated sellers in structurally strong rental markets, individual deals may make sense even when the broad market doesn't. This is where attention to specific opportunities pays off.
A Note on Timing and Why Women Investors Should Pay Attention
One pattern I see repeatedly in the women I work with is they hesitate during uncertainty and then act when confidence has returned which often means paying full price in a recovered market. The irony is that the conditions that feel most uncomfortable are frequently those that in retrospect contained the best entry points.
I'm not saying that moment is now. I genuinely don't believe it is. But I do think the next 12 to 18 months deserve close attention. If the landlord exodus continues, if prices in certain markets soften and if wider economic conditions shift there may be a window worth being ready for.
The investors who benefit from that window will be the ones who have done the analysis in advance, understand what they are looking for and have the financial position to move when the conditions are right. Not those who panic bought in 2021 and not those who are too cautious to engage until prices have already recovered.
Where I Land
The Renters' Rights Act isn't the story. The story is whether UK residential property makes financial sense as an investment in 2026 and at current taxation, current costs and current entry prices, I think the honest answer for most investors is not quite yet.
But the conditions may be shifting. A market where less informed participants are exiting in volume, where prices may be entering a softer phase and where serious investors are watching rather than acting, that is exactly where opportunities historically emerge. I'm watching property prices, yields, taxation and construction costs carefully. When the case can be made properly, I'll make it.
It can't be made yet. But I'm paying attention.
If you're weighing up whether property makes sense for your portfolio right now, book a discovery call with Nicole.
