A decade ago, this was barely worth asking. Buy-to-let was the default choice for British wealth-builders: leverage cheap mortgages to buy property, pocket the rental yield, and ride the capital appreciation. Millions did exactly that. Many did very well.
2026 is a different landscape. Mortgage rates are materially higher than the pre-2022 era. Section 24 has stripped landlords of the ability to deduct mortgage interest from rental income. CGT rates on residential property have risen. Regulation has multiplied. And yields that looked attractive at 2019 prices look thin at 2024 and 2025 prices.
This article does not tell you whether to sell your properties. It does an honest accounting of what the numbers look like for a typical landlord in 2026 — and explores what alternatives investors in your position are using.
The numbers that have changed since 2019
Three things have structurally changed the economics of buy-to-let since the peak of its popularity:
Mortgage rates
The average two-year fixed buy-to-let mortgage rate was below 2% in 2021. By 2024 it had exceeded 5% for most landlords, and while rates have eased slightly since, they remain dramatically higher than the era that made leveraged property investment so attractive. A landlord with a £200,000 interest-only BTL mortgage who fixed at 1.8% in 2021 was paying £3,600 per year in interest. At 5%, the same mortgage costs £10,000 per year — nearly tripling the financing cost.
Section 24 — mortgage interest restriction
From 2020/21, landlords can no longer deduct mortgage interest from rental income when calculating their tax bill. Instead, they receive a 20% tax credit on mortgage interest paid. For basic-rate taxpayers, the practical impact is neutral. For higher and additional-rate taxpayers, the impact is severe: they are now paying tax on income they never actually receive, because the interest cost is not deductible.
A landlord earning £12,000 in rent and paying £10,000 in mortgage interest used to pay tax on the £2,000 profit. Under Section 24, they pay tax on the full £12,000, then receive a 20% credit on the £10,000 interest. For a 40% taxpayer, this means a real tax bill on a property that is barely breaking even.
CGT on residential property
Capital gains tax on the sale of residential buy-to-let property is 24% for higher-rate taxpayers (from April 2024). For a landlord who bought a property 15 years ago and has seen substantial appreciation, the CGT bill on exit can be very large — large enough to make selling feel economically unattractive, even if the ongoing economics of holding are deteriorating.
Is it still profitable?
It depends entirely on your specific situation — loan-to-value, mortgage rate, rental yield, tax bracket, and how long you have held. But for a landlord who is higher-rate taxpayer, bought with leverage at a typical yield in a major city, and is now refinancing onto current rates, the honest answer is: often barely, and sometimes not at all.
Landlords who own properties outright — no mortgage — in areas with strong yields (typically the North of England and parts of the Midlands) continue to generate meaningful cash flow. Leveraged landlords in London and the South East, where yields are thin, are frequently in negative cash flow or only marginally positive after financing costs and tax.
What landlords are doing
The landlord exodus is well documented. The number of buy-to-let mortgages in the UK has been falling. Some landlords are selling — and facing the CGT bill. Others are restructuring through limited companies (where mortgage interest remains deductible). A third group is looking at alternative ways to deploy capital that remains locked in property.
The CGT issue is particularly interesting. Landlords sitting on large unrealised gains often feel trapped: the economic case for holding has weakened, but selling crystallises a large tax bill. EIS's CGT deferral relief was designed precisely for situations like this — it allows you to sell, defer the CGT by investing the proceeds in EIS, and redeploy capital into something with different characteristics.
The question worth asking
The question is not really "is buy-to-let worth it?" The question is: given where you are now, given the capital you have tied up in property, and given the alternatives available to you — what is the best use of that capital going forward?
That is a question that deserves careful analysis and, for most landlords, independent financial advice. The answer will be different for every landlord depending on their equity, their tax position, their income needs, and their attitude to different types of risk.