Was 2025 the year of 'wait and see' for landlords?

December 2025

If you're a landlord, 2025 has probably felt like the longest year of "will they, won't they" in recent memory. From the Renters' Rights Bill to interest rate speculation, EPC targets to stamp duty changes, the private rental sector spent most of the year in a holding pattern waiting for clarity that often didn't arrive.

Now that we're approaching the end of 2025, it's time to take stock. What actually happened? How did rents behave? Did landlords really leave in droves? And most importantly, what does it all mean for you heading into 2026?

This article looks at the data behind the year that was, unpacks the key trends that shaped landlord decisions, and offers practical guidance on what you can do next.

The big picture: A rental market in transition

The UK rental market in 2025 was defined by one word: stabilisation. After the frenetic growth of 2021-2023, when rents surged by over 36% and tenant demand reached fever pitch, the market finally began to cool.

Average UK rents reached £1,301 per month by July 2025, with annual growth slowing to just 2.4%, the lowest rate in four years. By November, the average had climbed slightly to £1,337, but monthly growth had turned negative for the first time in years, down 0.6% from October.

This wasn't a crash. It was a market finally hitting affordability ceilings. Rental yields averaged 6% across the UK, rising above 7.5% in areas like the North East and Scotland, so profitability remained strong for many. But the breakneck pace of rent increases was over.

For landlords who'd grown accustomed to annual double-digit growth, this shift felt significant. For tenants stretched thin by years of rising costs, it was a tentative moment of relief.

Supply began to recover, demand began to ease

One of 2025's most notable shifts was the change in supply and demand dynamics.

The number of homes available to rent increased by almost a fifth compared to 2024, while letting agents reported 24% fewer tenant enquiries than the previous year. Properties that once attracted 16 or more enquiries now averaged around 12, still double pre-pandemic levels, but a clear sign that competition was easing.

What drove this? Several factors:

Improved mortgage availability - The number of new buy-to-let mortgages for home purchases rose by 60% in the year to the first quarter of 2025, encouraging some landlords who'd been sitting on the sidelines to re-enter the market.

First-time buyers returning - Changes to mortgage affordability rules in early 2025 delivered a 20% boost to borrowing capacity for first-time buyers, allowing some renters to exit the rental market entirely.

Tighter immigration controls - UK net migration has fallen by around 60–70% from its 2022–23 peak, easing one of the key drivers of rental demand in recent years, though migration is still adding to the population overall.

The result? A market that was still tight, but no longer suffocating. If you've noticed fewer applications per property or slightly longer void periods, you're not alone.

Landlords selling and the numbers behind the narrative

The headlines throughout 2025 screamed about a landlord exodus. And yes, many landlords did sell. Data shows landlord confidence was particularly weak in October 2025, with mounting uncertainty ahead of the Autumn Budget and potential tax increases.

But the reality was more nuanced. Research from Paragon Bank showed that 87% of landlords reported a profit in Q2 2025, up from 84% in Q1. So the market wasn't collapsing, it was recalibrating.

Around one in four landlords planned to sell properties in 2025, with London leading the exodus, where nearly one in four homes listed for sale were ex-rentals. Rising mortgage costs, compliance burdens and uncertainty over future regulations pushed many to reassess whether staying in the market was worth the hassle.

Yet interestingly, investors still purchased 11.3% of homes in Q3 2025, essentially flat year-on-year despite the second-home stamp duty surcharge rising to 5% in April. The mix simply tilted northwards, where entry costs were lower and yields stronger.

So were landlords really quitting? Some were. But others were buying, particularly those who understood the new rules and structured their investments properly.

The Renters' Rights Bill reform loomed all year

If there's one piece of legislation that dominated landlord conversations in 2025, it was the Renters' Rights Bill (now the Renters' Rights Act). After passing through Parliament with multiple amendments, the bill continued to create uncertainty for landlords trying to plan for the future.

The headline changes included:

Section 21 abolition - No-fault evictions were finally scrapped, forcing landlords to rely entirely on Section 8 grounds for possession. The problem? Courts were already backlogged, with some contested evictions taking eight months or more.

Rent increase restrictions - While the final version didn't include hard caps, the bill introduced stricter scrutiny on rent rises above certain thresholds, making landlords nervous about passing on rising costs.

Pet ownership rights - Landlords could no longer blanket-ban pets without reasonable justification, and many felt this would increase wear and tear on properties.

Benefit recipient protections - Landlords were prohibited from refusing tenants simply because they received housing benefit or Universal Credit.

For small landlords trying to stay compliant, the year felt like a moving target. If you struggled to keep up with the changes, you're not alone. Understanding UK landlord laws by region became more important than ever.

The good news? Tools designed for small landlords, like August's compliance checklist, can guide you through the obligations step by step, so you don't miss critical deadlines or requirements.

The 2028 energy efficiency deadline that shaped 2025 decisions

Another cloud hanging over landlords in 2025 was the looming 2028 EPC C requirement for new tenancies. While the government pushed the full implementation deadline to 2030 for existing tenancies, the uncertainty over enforcement and costs led many landlords to act pre-emptively or exit entirely.

About 49% of landlords held at least some stock at EPC D or below, forcing difficult decisions about capital expenditure. Upgrades to reach EPC C typically cost between £3,500 and £12,000 depending on the property, and many landlords questioned whether the investment was worthwhile.

Those who stayed in the market began prioritising energy-efficient properties. By the end of 2024, 58.3% of landlords had already made eco-friendly upgrades, while 24.9% planned to do so within the next five years.

If you're unsure about your obligations or next steps, it's worth reading up on energy efficiency requirements to understand how the rules apply to your properties and what support is available.

Regional variations: Where landlords thrived and where they struggled

Not all rental markets behaved the same way in 2025. While London saw rents inch up by just £3 per month to £2,698, some regional markets experienced dramatic changes.

Chippenham in Wiltshire saw a 16.4% annual rise, followed by Stockport at 16.1% and Coventry at 14.1%. Even traditionally lower-cost areas like Grimsby saw 12% increases, reflecting a nationwide trend of renters seeking affordability outside major cities.

The North remained the standout region for landlords seeking strong yields. Average rents in the North East were lowest at £756, but high yields and lower entry costs made the region attractive for investors.

London, by contrast, saw higher absolute rents but lower yields, with many landlords selling up to redeploy capital elsewhere. If you're considering where to invest next, understanding rental yield calculations can help you make informed decisions about which markets offer the best returns.

What landlords actually did in 2025

So how did landlords respond to all this uncertainty?

Wait and see - Many simply held tight, maintaining existing tenancies and avoiding major portfolio changes until the regulatory picture clarified.

Selective selling - Those who did sell tended to offload properties with the highest compliance costs, lowest yields or most challenging tenant situations. Around 26% of rental properties had their asking rent reduced in 2025, as landlords prioritised tenant retention over maximum rent.

Restructuring - Sophisticated landlords increasingly moved properties into limited companies to avoid Section 24 tax penalties and improve borrowing capacity.

Going north - Investors shifted focus towards northern regions where yields remained strong and entry costs manageable.

Investing in compliance - Forward-thinking landlords used 2025 to get ahead of requirements, upgrading EPCs, installing new boilers and documenting everything properly to avoid future headaches.

If you're an accidental landlord still figuring out the basics, our essential checklist for accidental landlords is a good starting point.

Lessons from 2025 - what we learned

Looking back, several clear lessons emerged:

Affordability matters - Rents can only rise as far as tenant budgets allow. When prices hit ceilings, growth stalls regardless of demand.

Supply and demand are finally rebalancing - After years of severe shortage, the rental market is slowly moving towards equilibrium, though regional variations persist.

Compliance is table stakes - Landlords who treated regulations as optional paid the price through fines, void periods and tenant disputes. Those who stayed organised thrived.

Profitability remains possible - Despite the challenges, most landlords remained profitable when they managed costs carefully and maintained good tenant relationships.

The right tools matter - Landlords using property management software to track rent, manage compliance and store documents reported significantly less stress and fewer compliance issues.

What happens next? Looking ahead to 2026

As we head into 2026, expect the themes of 2025 to continue: moderate rent growth, gradual supply improvements (although this is far from certain) and the start of the implementation of the Renters' Rights Act. For example, next year we will see Section 21 abolished.

Forecasts predict advertised rents will increase by approximately 3% in 2026, a far cry from the double-digit growth of recent years, but still above inflation. Interest rates are expected to stabilise or fall slightly, which could encourage more landlords to invest or refinance onto better deals.

For landlords, the key will be staying informed, remaining flexible and having the right systems in place to manage compliance without constant stress. Whether you're managing HMO properties, dealing with end of tenancy processes, or trying to understand reasonable repair wait times, having a clear process matters.

Is being a landlord still worth it in 2025?

After a year of uncertainty, headlines about landlords leaving and mounting compliance pressures, it's fair to ask: is being a landlord still worthwhile?

The answer depends on your circumstances. If you're heavily leveraged on high-interest mortgages, managing older properties requiring significant EPC upgrades, or simply tired of the administrative burden, 2025 might have felt like the breaking point.

But if you've structured your investments sensibly, maintained good relationships with tenants, stayed on top of compliance and embraced technology to reduce admin, 2025 likely proved that landlording remains profitable and sustainable.

The landlords who succeeded in 2025 weren't those who simply waited for things to improve. They were the ones who adapted, invested in the right tools and treated property management as a professional business rather than a passive income stream. You may also like our review of twelve Christmas questions.

How August can help

Being a landlord in 2025 meant juggling more regulations, managing tighter margins and staying organised across multiple properties. That's exactly why August was built.

August brings together everything small landlords need in one place - rent tracking, document storage, compliance reminders, maintenance logs and a tenant app - so you can manage your properties professionally without the stress.

Whether you need help staying on top of gas safety certificates, understanding what makes a property an HMO, or simply keeping track of who's paid rent this month, August handles it for you.

You can even use August Intelligence to get instant answers to questions like "What are my obligations under the Renters' Rights Bill?" or "When does my EPC expire?"

If 2025 taught us anything, it's that landlords who invest in proper systems succeed while those who wing it struggle. Download August for free and see how it can help you manage your rentals more efficiently heading into 2026.

Use our monthly landlord calendar to plan ahead, stay compliant and keep tenants happy all year round.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Always speak to a suitably qualified professional if you require specific advice or information.