Buy to Let in 2026: What Landlords Need to Know
The buy-to-let landscape in 2026, tax, lending, compliance and where it leaves landlords.
Buy-to-let in 2026 is a more professional business than it was a decade ago. Section 24 has restricted tax relief on mortgage interest for personal-name landlords since 2017. Lending criteria are tighter. Energy efficiency rules continue to evolve. For landlords who have adapted, BTL can still deliver good long-term returns, but it is not the casual sideline it once was.
The tax picture
Section 24 is now fully in force. Personal-name landlords get a 20% tax credit on mortgage interest instead of a direct deduction. For higher-rate taxpayers this can mean paying income tax on turnover rather than profit. Limited company ownership remains exempt, mortgage interest is deductible from company profits as normal.
The 5% stamp duty surcharge on additional properties continues to apply, and the 2% surcharge on non-UK residents remains in place. Capital gains tax on residential property stands at 18% (basic rate) and 24% (higher rate) in 2026.
Lending in 2026
Buy-to-let lending is based on rental income, not personal affordability. The standard calculation is a stressed interest cover ratio (ICR), the rent must cover the mortgage interest by a minimum multiple (usually 125–145%) at a stressed rate. Lower LTVs and longer fixes often get more favourable stress rates.
Specialist lenders dominate the portfolio and limited company segments. Most high-street lenders will not lend to landlords with four or more BTL properties, in that space, brokers and specialist lenders matter more than ever.
Energy efficiency
Minimum EPC requirements for rental property have been raised periodically. Planning for upgrades, insulation, heating, windows, is now a standard part of portfolio management. Some landlords have accelerated sales of the least efficient properties; others have invested in upgrades.
The practical outlook
For accidental landlords or those holding unmortgaged (or low-LTV) properties, BTL can still work comfortably. For highly-leveraged personal-name portfolios, the maths are tighter than they were.
The question many landlords ask is whether to keep expanding, restructure into a limited company, or gradually wind down. The right answer depends on tax position, age, plans and the individual properties. Accountancy and mortgage advice together are usually worth the fees.
Key takeaways
- Section 24 fully in force, limited companies avoid it but have their own costs
- BTL lending uses rental coverage, not personal affordability
- Specialist lenders dominate portfolio and limited company BTL
- EPC rules continue to evolve, plan upgrades into portfolio costs
- Take combined tax and mortgage advice before major restructuring decisions
Talk to a real adviser
Mortgage advice. Named adviser. No call centre.
Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage.
Some buy-to-let mortgages are not regulated by the Financial Conduct Authority.
Major Money Matters Ltd is an appointed representative of Sesame Ltd which is authorised and regulated by the Financial Conduct Authority. FCA reference: 409534. Registered office: 133 Shepherds Hill, Harold Wood, Romford, RM3 0NR.