London has been found to have the UK’s fastest-growing buy-to-let (BTL) market, with an impressive 13% rise in new landlords recorded between 2023 and 2024, according to research conducted by Simply Business. This leap follows a more restrained increase of 4.11% observed in the previous year, highlighting a notable shift in market dynamics.

Drawing insights from over 100,000 landlord insurance policies, Simply Business uncovered regional hotspots beyond the capital. Birmingham and Leicester each saw a 12% uptick in new landlords, closely followed by Leeds at 11%. Meanwhile, Manchester and Nottingham both posted 10% growth, cementing their positions as key players in the BTL landscape.

On the other hand, Glasgow, which had performed robustly during 2022-23, reported a comparatively modest 7% increase, marking the lowest growth rate among major cities.

While these figures highlight a buoyant market in some areas, Simply Business also shed light on significant challenges facing landlords, particularly in the realm of regulation. Concerns over new government policies loom large, with 71% of landlords expressing fears that the current administration will negatively impact the BTL sector. Additionally, 69% cited evolving legislation as their greatest obstacle.

The burden of rising mortgage costs is another pressing issue. According to the research, 38% of landlords now view this as a major threat to the rental market—a notable jump from 31% in the previous year.

Amidst these trends, seasoned landlords like Mike Harvey are navigating the complexities with optimism. Harvey, who has 25 years of experience in the London market, observed: “The London rental market is performing very well. It’s straightforward to find good tenants, and rental incomes remain strong.

“As a landlord, I’m also finding that insurers are very competitive at the moment, and I have easy access to a wide range of tradespeople who are always quick to respond when I need help with my properties.”

Sharing insights into his property strategy, Harvey added: “We have a 2-unit block and have found these to be the least hassle, with the nicest tenants and best investment return – so we’re very pleased with this position for the short and long term.”

Julie Fisher, UK CEO at Simply Business, offered a broader perspective on the evolving market. “2025 will be a game-changer for UK landlords, with new regulations and rising costs reshaping the market,” she stated.

Fisher noted a fascinating shift in how landlords are factoring trade services into their investment decisions, driven largely by the upcoming Energy Performance Certificate (EPC) requirements. “We know from our research that half of landlords need to make improvements to reach an EPC rating of C, and over a third (34%) report they will need to spend up to £10,000 to comply with the rules,” she explained.

Despite these hurdles, Fisher emphasized the enduring significance of landlords within the housing market. “Though challenges remain, the importance and resilience of landlords – and the market – should not be underestimated. Rental demand remains high as people seek flexible housing to suit their studies and work, and landlords that are able to follow and adapt to the changes effectively can absolutely still find opportunities for steady rental income and capital growth, with a vital role to play in the UK housing market.”