Is being a landlord still worth it?

The Property Podcast

The episode explores the economic viability of being a landlord in 2026, featuring data from Zoopla's Richard Donald. It addresses common fe

Key takeaways

There is no true landlord exodus; supply remains static as older landlords exit and are replaced by new investors.
The Renters' Rights Act has not yet caused a material decline in the number of active landlords.

Main topics

Landlord exodus myths
Renters' Rights Act impact

Notable quotes

Is it still worth being a landlord in 2026? Yes, if you treat it as a business...

Conclusion

While the era of easy capital gains through house price inflation may

Transcript preview

Speaker 1 (0:00) you Hey everyone, Rob B here with Rob D and you are listening to The Property Podcast. Is it still worth being a landlord in 2026? Everyone will have an opinion and opinions are interesting, but you know what really matters is data and using that data to come to a calculated conclusion. Well, we're very lucky this week that we've got Richard Donald back on from Supler because he's going to help you understand if being a landlord is still right for you in 2026 and beyond. Speaker 3 (0:36) Welcome to the Property Podcast. Thank you for joining us. We run a business that helps clients invest more than £100 million into property every year. You can find out about that at propertyhub.net slash invest. But while there are lots of people listening who are going in all guns blazing, full of enthusiasm, there are lots of others thinking, should I? Is now the time? And plenty, plenty more who are already property investors wondering if that still makes sense. And Rob, you said it, there are opinions everywhere, often very strongly expressed opinions as well. But not all of those opinions are worth listening to. And one that definitely is, is someone who has a whole world of data at his fingertips. Speaker 1 (1:13) Yes, and that's Richard Donald, the Executive Director of Research at Zoopla. He has all that information. Speaker 3 (1:19) Yeah, and as this is Richard's second time on the podcast, we felt like we could skip the small talk and get straight into the tough stuff. Speaker 1 (1:25) Richard, I'm not going to go in gently. I'm going to ask the big question, the question that we all want to know. We're not going to save this to the end. With all the data that you have in front of you. Is it still worth being a landlord in 2026? Speaker 2 (1:37) Yes, if you treat it as a business where you focus on providing good quality homes for the future and focus on the rental income over the long run, being a landlord has a place as part of a balanced investment portfolio. But I think it's no longer a market for short-term speculation, hoping for rapid house price inflation to drive your returns, basically. And the reality is investing today is about putting down a sizable chunk of equity. and focusing on that long-term income. It's a different business model to maybe how a lot of landlords got into the market over the last 10, 15 years or so. Speaker 3 (2:11) Something that's been all over the headlines for a long time now is the landlord exodus. Landlords supposedly heading for the exits in droves as a result of the Renters' Rights Act, among other things. To what extent is that true? Are landlords selling? And if so, which landlords are selling and what's happening to those properties? Speaker 2 (2:32) There's not an exodus because an exodus sounds like literally everyone is sort of leaving the room. If we look at it at a headline level, the total number of private rented homes in Britain is the same today as it was 10 years ago. So really, we've got static overall supply. And that really means that landlords who are leaving are being offset by landlords coming into the market. So there's still landlords buying. They're buying in less numbers. And there are some landlords rationalising their portfolios, maybe homes that are going to be hard to retrofit for minimum energy standards, or they're just costing too much money to kind of repair and maintain. And so I think landlords are sort of doing some portfolio rationalisation. And the landlords that have been leaving, I think, are the ones who have never really got into it for the business of being a landlord. You know, government surveys show that 40 % of landlords bought their first property to live in and then ended up renting it out because of various needs and requirements. So I think it's the smaller landlord who never really got into it as the business of being a landlord and focusing on the cash flow. And the people who are investing are the people with larger, more mature portfolios. They treat it as a business. They're interested in that long-term income and cash flow. And they're the people who are kind of really investing in the market at the moment. And if you're a landlord selling... If it's flat or a small house, it's going to be bought by a first-time buyer who doesn't mind buying a house that might be a bit tired and needs some money spending on it. If you're selling a three-bed house, four-bed house, then it's very likely to be a home buyer who probably will think the same way. Speaker 1 (4:00) Of these investors who are buying, what patterns are you seeing in what and where they're buying? What does the data tell you? Speaker 2 (4:09) I think the data basically says that Yields are really important and yields are higher in the north of England and Scotland. Just because we've got higher interest rates, we've got higher bond yields. At the end of the day, investing in properties is like investing in anything. Investors want to get a kind of return. So we're not seeing a lot of investment happening where yields are really low, particularly in London and parts of the south of England. But I think... Investors are getting around these yields by also buying properties that are pretty tired and ready to be developed. So I think a lot of landlords now almost expect to buy a property that needs some work. They can get it to an EPCC if they need to get it there. They can spend the money to kind of add value to the property. They could potentially offset that, probably could offset that against any gains they make in the future when they come to sell the property. And that means they get a property that hopefully costs them less money to manage in the long run. And they can get the average or slightly above average market rent. And they can almost refurbish the property specifically for the purposes of renting and potentially designing out certain things or changing the finishes of certain features so that there's a little bit more wear and tear for renters rather than maybe the finish for an owner-occupier. Speaker 3 (5:22) What's your data showing about? yields across the country? Because we've spoken before about how rates of rental growth, what rents