The shape of the Ipswich Lettings market has undeniably changed over the past five years, alongside the changes we’ve seen in the UK buy-to-let market in general.
But with change comes opportunity, especially for those willing to put in the hard yards -and more especially still, those who come at it with an attitude of being a force for good in the sector. Frankly, those are the sort of Landlords that at LEA Property Solutions we like to work with (and want to see more of)!
In today’s blog, we explore the notable decline in small private landlords since 2019 and how many are choosing to exit the market due to the range of financial and regulatory pressures they perceive will affect them…. But we also take a look at how these shifts have created new openings for investors who are prepared to navigate the evolving landscape, and how HMO investment might be a savvy move for landlords to look at.
The Decline of Small Private Landlords in Suffolk
A key trend in the East Anglian property sector has been the retreat of smaller landlords, who once made up a significant portion of the buy-to-let market, in favour of larger corporate lettings entities and wealthy portfolio landlords – which interestingly favours HMO Investors, offering shared housing solutions for a local work force and, in Ipswich in particular, a growing student population.
The exodus of smaller individual-property landlords from the market – oftentimes the so-called ‘accidental landlords’, through inheritance or other means – can be seen in the drop off in new buy-to-let mortgages. According to the latest data from the FCA, this lending has fallen nationally from £17.7 billion in 2019 to £14.6 billion in 2024 – almost an 18% decrease.
This is in stark contrast to mortgage spending in general, which has increased by 12% over the same period.
Several factors have contributed to this decline, including changes in taxation, tightening regulations, and even economic uncertainties. Private landlords, particularly those who own one or two properties, have found it increasingly difficult to turn a profit, leading many to sell their portfolios and exit the market entirely.
Key Reasons Landlords Are Exiting the Buy to Let Market
1. Changes to Mortgage Interest Tax Relief
Previously, landlords were able to deduct mortgage interest from their rental income before calculating tax. However, since April 2020, landlords have only been able to claim a 20% tax credit on mortgage interest payments, significantly reducing profitability – particularly for higher-rate taxpayers. This has made it less financially attractive for private landlords to remain in the market – even those whose main ambition was for long term capital growth rather than an instant monthly return.
Where landlords have found themselves subsidising their investment each month, it has put many off sticking it out for a longer haul, particularly those who have already made a good amount of equity growth.
Many of those see an opportunity to ‘cash in’ and to reinvest funds into other things.
2. Increased Stamp Duty on Additional Properties
Another financial hurdle has been the introduction of a 3% stamp duty surcharge on second homes and buy-to-let properties. This raised the upfront cost of investment, making it harder for landlords to justify new purchases, particularly those with tight margins.
3. Stricter Energy Efficiency Regulations
Proposed changes to Energy Performance Certificate (EPC) requirements have also deterred some landlords. The government had planned to increase the minimum EPC rating for rental properties to C by 2028. While these plans have recently been reconsidered, the uncertainty and potential costs involved in upgrading older properties have discouraged landlords from staying in the market. For many, although that change has been currently put on hold, it feels like a Sword of Damocles that will swing down again at some point.
4. The Renters’ Rights Bill and Market Uncertainty
The Renters’ Rights Bill, currently progressing through Parliament, is another significant factor. It aims to abolish Section 21 ‘no-fault’ evictions, strengthen tenants’ rights, and introduce a Decent Homes Standard in the private rental sector. While these reforms are designed to protect tenants, they have also raised concerns among landlords about reduced flexibility and increased risks.
A Shift Towards Cash Buyers
While smaller private landlords have been leaving the market, another trend has emerged: the resurgence of cash buyers. In 2019, cash buyers accounted for £118.9 billion in property purchases, a figure that rose to £146.5 billion in 2024. That is a 23.21% increase.
Cash buyers, who are unaffected by rising mortgage rates (although not always unaffected by rising interest rates in general), have gained a stronger foothold in the market. Many are experienced investors looking to expand their portfolios.
Again, this is often seen in the HMO market, where larger investment bodies tend to opt to purchase higher-yield HMO properties for a lettings portfolio, from cash held in a corporate fund or trust.
However, more and more cash buyers are new entrants taking advantage of the reduced competition in the sector – often lifting cash held in other investments such as stocks or bonds, and reinvesting in what now looks to them like a high-yield, secure-return marketplace.
Without the burden of interest payments, cash buyers are in a stronger position to offer competitive rental prices while maintaining healthy profit margins.
Nevertheless, cash-rich investors are not the only buy-to-let purchasers who can take advantage of these market conditions.
Are there Opportunities for traditional Buy-to-Let Investors in Ipswich?
Despite the challenges, these market changes create fresh opportunities for well-prepared investors. With smaller landlords leaving, there is less competition for properties in the Ipswich sales market, particularly those at the lower end of the market that are ideal for rental. This shift presents an attractive opening for investors who are willing to take an open-minded view about what opportunities the current landscape presents, and who are willing to listen to advice.
Here are a few things to consider:
1. Less Competition in the First-Time Buyer Market
First-time buyers have been a dominant force in the property market in recent years, partly due to government incentives such as stamp duty relief. However, as these incentives are set to expire on April 1st, first-time buyer activity is expected to slow down. This will reduce competition for entry-level properties – for a period (these things always reset sooner than you think), allowing buy-to-let investors an opportunity to purchase with less competition… which is code for: more affordably!
2. Higher Yields in a Tight Rental Market
With fewer small landlords operating, the supply of rental properties has tightened, pushing up rental prices in many areas. This has created an environment where investors who can enter the market now may see higher rental yields. Areas such as central Ipswich popular with professionals, and family-oriented residential areas around school catchments such as Northgate and Coppleston, continue to experience strong demand from renters, making them attractive locations for buy-to-let investments.
3. Opportunities to Buy Distressed or Undervalued Properties
The changing landscape has also created more opportunities for investors to purchase distressed or below market value (BMV) properties from landlords who are exiting the market – not least, leasehold properties with short leases. These properties may require some investment to bring them up to standard, but they can offer strong long-term returns, particularly if purchased below market value – and particularly taking a punt that lease extension costs are likely to reduce once the Leasehold and Freehold Reform Bill passes and becomes a full Act of Parliament, hopefully this Summer.
4. Favourable Conditions for Ethical Landlords
While some landlords may have been put off by the incoming regulations, those who are committed to providing high-quality, well-maintained properties at fair rental prices are well-positioned to succeed. With a growing emphasis on professional management and tenant rights, landlords who invest in quality housing and provide good service are likely to attract long-term tenants and experience fewer void periods.
Conclusion: A Market in Transition Presents a World of Opportunity
The landscape for buy-to-let investment has shifted significantly since 2019, with a significant number of smaller landlords leaving due to taxation, regulatory pressures, and financial constraints. However, this does not mean the end of the buy-to-let market in 2025; it marks the beginning of a new phase.
For those with the capital and strategy to invest wisely, the current climate presents a wealth of opportunities. Lower competition, rising rental demand, and the departure of less-profitable landlords all contribute to a market where new investors – and not just cash buyers – can thrive. It just takes a little thought and a little research, and perhaps – dare we say it – taking some advice from local lettings experts who can guide you to the right properties and help to set the right rent.
Ipswich and South Suffolk, with our strong rental demand and vibrant communities which are well linked to transport routes for good access to London, remain key areas for savvy property investors. Our local area will undoubtedly continue to attract tenants looking for well-located, high-quality rental homes, as well as HMOs to accommodate the growing population of students in Ipswich and single professionals in the services and tech sectors locally.
For investors who are willing to adapt and navigate the new regulations, or new investors willing to embrace what to them is simply the Status Quo, buy-to-let remains one of the best long-term investment strategies available.
The key takeaway? The buy-to-let market isn’t dying. It is evolving.
Those who understand the changes and act accordingly will find that it remains one of the most resilient and rewarding investment avenues in the UK property sector.