The UK housing market has seen significant shifts recently, and one of the most impactful changes for private landlords is the increase in stamp duty. Starting in April 2025, these changes have increased the financial burden on landlords purchasing new properties. With limited options and a strain financially, many Landlords pulling out altogether presenting problems such as a shortage of decent homes for a growing rental market. 

What the Stamp Duty Increase Means for Private Landlords 

As of April 2025, the threshold for stamp duty has been lowered from £425,000 to £300,000. This means that more properties are now subject to stamp duty, and landlords who purchase investment properties above this new threshold will see an increase in their upfront costs. For example, if a landlord buys a property priced at £350,000, the stamp duty would now be significantly higher than before, adding a considerable financial burden to the acquisition. 

For landlords looking to expand their portfolios, the increase in stamp duty could make new investments more expensive. With higher upfront costs, some landlords may reconsider purchasing properties altogether or may look to scale back their expansion plans. This will likely have a direct impact on landlords’ ability to grow their portfolios, particularly for those relying on capital appreciation from property values. 

Increased Financial Pressure on Buy-to-Let Landlords 

For private landlords with buy-to-let properties, the increase in stamp duty comes at a particularly challenging time. The combination of rising tax costs and a cooling housing market has created financial uncertainty. Many landlords are already feeling the pressure from other factors, such as rising costs and the difficulty of passing those costs onto tenants. 

Landlords who were planning to buy new investment properties will now face higher stamp duty charges. These additional costs may make it harder for landlords to turn a profit, especially when rental yields are tightening and the cost of financing properties remains high. As a result, landlords may feel less inclined to make new investments or may even consider selling off properties that no longer fit into their financial strategy. 

The Risk of Landlords Exiting the Market 

The increased stamp duty is likely to encourage some landlords to exit the buy-to-let market entirely. Experts predict that around 11% of landlords may choose to sell their properties in response to these changes. With fewer landlords purchasing properties, this could lead to a decrease in the availability of rental homes, especially in the mid-range price segment. The potential for rising rents due to reduced supply could make it even harder for tenants to find affordable accommodation. 

This exodus could also lead to a decrease in the overall quality of rental properties available on the market. As landlords look to exit, they may sell off properties that are in need of significant maintenance or upgrades, leading to a reduction in the availability of well-maintained, high-quality rental homes. 

The Broader Impact on the Housing Market 

The government’s decision to increase stamp duty will likely have ripple effects on the broader housing market. With fewer private landlords purchasing properties, there will be less capital flowing into the housing sector, which could slow down the pace of property value growth. This slowdown is compounded by a cooling housing market, which saw house prices fall by 0.6% in April 2025. 

Fewer landlords buying properties could also have long-term consequences for the housing supply, especially as first-time buyers continue to face challenges in entering the market. Reduced demand for rental properties will create a more competitive market, potentially driving up rents, which could place further strain on tenants. 

How Landlords Can Adapt to the New Landscape 

Despite the challenges posed by the stamp duty increase, private landlords can still adapt and find ways to protect their investments. One of the most effective strategies is reviewing and reassessing their property portfolios. For landlords with properties that are underperforming or no longer generating enough income, selling may be an option to mitigate losses and free up capital for other investments. 

Additionally, landlords could explore alternative investment strategies to diversify their portfolios. Some landlords are shifting focus to holiday lets, which offer higher yields than traditional long-term rentals, especially in areas with a steady flow of tourists. A second viable option is converting properties into Houses in Multiple Occupation (HMOs). These properties typically generate higher rental yields, as they accommodate multiple tenants rather than a single household. 

Furthermore, it is important for landlords to stay up-to-date on government policies and potential tax relief opportunities. Many are increasing the pressure on the government to offer tax relief to offset the cost of the energy efficiency measures which will become compulsory in the coming years. 

Conclusion: Navigating the Changing Market 

The increase in stamp duty is undoubtedly a significant challenge for private landlords. With higher upfront costs, increased financial pressure, and the possibility of exiting the market, landlords must carefully consider their next steps. By reassessing their property portfolios, diversifying investments, and staying informed about potential government incentives, landlords can continue to manage and grow their investments despite the changing landscape. 

At Naccs, we understand the pressures that private landlords are facing in today’s market. Our team of experts is here to provide guidance and support. If you have empty properties or are considering those first steps on the property ladder, have a chat with us. Our No Voids and Guaranteed Rent initiative gives you peace of mind and much less hassle throughout your tenancies. We will take care of obtaining a tenant and ensuring your investment is working for you.  Contact us today to discuss how we can help you stay ahead of financial changes and continue to thrive in the property market.