Buy-to-let after the Renters' Rights Act: is it still worth it in 2026?

What changed for landlords in 2026?

The Renters' Rights Act came into force for most tenancies in England on 1 May 2026. Section 21 "no-fault" evictions ended, and most assured shorthold tenancies converted to assured periodic tenancies with no fixed term.

• Possession: landlords now need a legal ground under Section 8, such as selling, moving in or rent arrears.
• Rent increases: once a year, using a Section 13 notice, which tenants can challenge at tribunal.
• Rent in advance: landlords can no longer demand large advance payments once a tenancy has started.

Further phases, including a landlord database and ombudsman, are being rolled out. Rules differ in Scotland, Wales and Northern Ireland.

Do mortgage lenders still lend on buy-to-let?

Yes. Lenders adjusted their tenancy clauses for periodic tenancies, and buy-to-let products remain widely available. Most lenders cap loans at around 75% of the property's value, with some going to 80% at higher cost.

Affordability is still driven by rent, not salary. Lenders test the rent against a stressed interest rate, known as the interest cover ratio (ICR). Our ICR guide explains the maths. Most buy-to-let lending for investment is not regulated by the FCA.

How will the April 2027 tax changes affect my returns?

From 6 April 2027, property income for individuals in England, Wales and Northern Ireland will be taxed at separate rates two points higher than standard income tax: 22%, 42% and 47%. Mortgage interest relief for individual landlords will move to a 22% tax credit.

For a higher-rate taxpayer with a mortgage, this widens the gap between gross yield and real profit. It is also why many lenders use higher ICRs for higher-rate taxpayers. Properties owned through a limited company pay corporation tax instead, so these rates do not apply inside the company. See limited company buy-to-let.

What about EPC C by 2030?

The government has confirmed that privately rented homes in England and Wales must reach EPC C by 1 October 2030, for new and existing tenancies. Landlords will not be required to spend more than £10,000 per property, with exemptions above that cap.

Some lenders already offer better terms on efficient homes. When buying, budget for upgrades on anything rated D or below. A lower purchase price can make sense if the works are priced in.

New-format EPCs with additional metrics are also being introduced.

How are lenders handling periodic tenancies?

Most lenders have updated their mortgage conditions so that assured periodic tenancies are acceptable. Previously, many required a fixed-term assured shorthold tenancy of six to twelve months. Check any older mortgage offer still in force for tenancy clauses, and tell your lender if your arrangements change.

Lenders are also paying closer attention to arrears and possession timescales. Good referencing, rent guarantee insurance and a reliable managing agent can all help. Keep tenancy paperwork tidy, as lenders and valuers may ask for it at remortgage.

Where are landlords still finding value?

Many investors are focusing on areas where rents are high relative to prices, on newer or recently upgraded homes, and on lower gearing. Others are buying through companies or moving into specialist property types. Each route has different lending criteria, so it pays to compare before committing.

A quick buy-to-let viability checklist

1. Rent coverage: does realistic market rent pass lender ICR tests at 75% LTV, or will you need a bigger deposit?
2. Net yield after tax: model your 2027 tax position, not today's.
3. Stamp duty: additional properties in England carry a 5% surcharge on top of standard rates. Use our stamp duty calculator.
4. Energy rating: cost of reaching EPC C.
5. Voids and arrears: possession now takes longer, so keep a cash buffer.
6. Ownership: personal name, limited company or joint names.
7. Exit: fixed-rate length and early repayment charges if you plan to sell.

So is buy-to-let still worth it?

For long-term investors with sensible gearing and good-quality stock, often yes. For highly geared landlords relying on thin margins, the changes bite harder. The answer depends on your tax band, the property and how long you hold.

A broker can test your figures against many lenders' criteria at once and show what loan size the rent actually supports. Specialist options such as HMO or multi-unit lending may produce stronger yields, with more management. As with any mortgage, your property may be repossessed if you do not keep up repayments.

Frequently asked questions

Important: This guide is general information, not personal advice. Rules, rates and lender criteria change; speak to an adviser about your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.

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