"With the Renters' Rights Act becoming law against a backdrop of rising mortgage rates, some landlords have taken the opportunity to leave the market. Increasingly, though, they're passing on their properties to other investors."
- Aneisha Beveridge - Hamptons
Buy-to-let investment has climbed to its highest level since 2016, driven by a sharp rise in landlord-to-landlord sales, where one investor acquires a property being sold by another. Rather than representing an influx of new buyers, the data points to a market reshuffle, with larger landlords absorbing stock from smaller operators choosing to exit.
Between January and April 2026, landlords accounted for 13.3% of all buyers across Great Britain. That matches the figure recorded at the start of 2016, when the second home stamp duty surcharge was first introduced, and marks a significant jump from 9.9% in the same period last year.
The sharpest increases have been in Northern England. Across the North East, North West and Yorkshire and Humber, landlords made up 23.9% of buyers so far this year, up from 14.5% during the same period in 2025.
Those levels are broadly comparable with the figures seen before 2016, prior to the introduction of higher stamp duty rates and tighter tax treatment. In the North West specifically, the landlord share more than doubled year-on-year, with investors accounting for 25.3% of purchases there, compared with 23.8% in the North East and 11.9% in Yorkshire and Humber.
Buy-to-let investment in the South has been far more muted. Across London, the South East, South West and East of England combined, landlords accounted for 9.1% of purchases, only marginally above the 8.8% recorded in 2025.
A market reshuffling, not a boom
The proportion of landlord purchases involving previously let properties has reached a record high. So far this year, 23% of homes bought by landlords had been rented by the previous owner, up from 16% in 2025 and a five-year average of just 9.9% between 2019 and 2023.
The pattern is most pronounced in areas where buy-to-let economics remain attractive. In the North East, 35.8% of landlord acquisitions involved previously rented homes, more than double the equivalent figure for London at 16.8%. In the capital, properties sold by landlords were more likely to be acquired by first-time buyers than to remain within the rental sector.
There has also been a notable shift in the type of property staying within the rental market. Houses now account for 60% of previously let homes bought by landlords in 2026, up from 40% five years ago, reversing the trend that previously favoured flats.
Investors purchasing a previously rented home this year secured an average gross yield of 6.7%, based on the rent paid at the point of sale and the acquisition price. That compares with 5.7% in 2022, reflecting both a broader rise in yields and the growing tendency for lower-yielding stock to be sold outside the rental sector.
Rental growth accelerates ahead of new legislation
The pace of rental growth picked up again in April. Tenants moving into a new property paid an average of 1.9% more than a year earlier, taking the average rent across Great Britain to £1,396 per month. That marks five consecutive months of accelerating growth and the fastest rate recorded in 11 months.
Inner London has been the primary driver. New let rents there rose 6.7% over the past 12 months, the fastest rate since November 2023, when prices were recovering at a double-digit pace following sharp pandemic-era falls. Average rents in Inner London now stand at £2,840 per month, 23% above their pre-pandemic peak, making it the only region in Great Britain where annual rental growth currently exceeds 3%.
Renewal costs are also rising. The average renewal in April was 3.2% higher year-on-year, reaching £1,312 per month. The strongest increases were in the Midlands, up 4.5%, and the North, up 4.8%, where rents agreed in recent years have left many tenants paying below current market rates.
"With the Renters' Rights Act becoming law against a backdrop of rising mortgage rates, some landlords have taken the opportunity to leave the market," said Aneisha Beveridge, head of research at Hamptons.
"Increasingly, though, they're passing on their properties to other investors. This means the recent spike in landlord purchases reflects homes changing hands between investors, rather than the dawn of a new buy-to-let boom.
"It's predominantly in areas where the economics of buy-to-let stack up best that homes sold by landlords are most likely to stay within the rental market. Higher yields across much of the North of England are more likely to offset rising mortgage and tax costs. Across much of the South, meanwhile, homes sold by landlords are more likely to be bought by a first-time buyer or owner-occupiers trading up.
"Rental growth strengthened in the final month before the Renters' Rights Act became law. As some landlords opted to sell ahead of the changes, more tenants were forced back into the market, increasing demand for homes to rent. While the full impact of the new rules is yet to play out, early evidence suggests they are already adding to upward pressure on rents."
