Listen to the discourse surrounding the Renters’ Rights Act, and the assumption is that regulation will invariably favour large portfolio landlords at the expense of smaller investors. However, while the private rented sector is undoubtedly becoming more professional, smaller landlords by no means have to take a backseat.
In fact, many of the qualities that make many smaller landlords successful today are the same qualities that will help them thrive under the new regulatory framework.
Recent research from Propertymark suggests that the average rental property still attracts seven applicants. While that figure has eased from the peak levels seen during the supply crisis, demand remains strong. Even after accounting for affordability constraints and unsuccessful applicants, most landlords continue to have multiple prospective tenants competing for every available property.
At the end of 2025, 45% of landlords still owned a single rental property, while a further 38% owned between two and four properties. Despite headlines surrounding the surge in professional and institutional landlords, Britain’s rental market still receives a significant portion of its supply from individual landlords. The difference now is that even one-property landlords have to operate like business owners.
Not every landlord needs a large portfolio, but understanding compliance obligations, maintaining accurate records, ensuring properties meet evolving regulatory standards, and planning tax efficiently (especially under a new digital tax regime requiring quarterly returns) have become non-negotiables. Many smaller landlords are already adapting by working closely with managing agents, accountants, tax specialists and other advisers.
Those landlords with an entrepreneurial mindset can go far in this new landscape. True entrepreneurs will look at the professionalising industry and aim to grow a portfolio through a well-thought-out business strategy. It is for this reason, that many investors are increasingly using limited company SPVs for new acquisitions, taking advantage of the tax efficiencies available. However, careful professional advice will be pivotal for smaller landlords looking into setting up an SPV or transferring existing properties into a company structure.
Additionally, smaller landlords often possess advantages that larger operators struggle to replicate. Institutional landlords may benefit from scale, but individual landlords typically have greater flexibility. This means more personal relationships with tenants, leading to stronger tenant retention, fewer disputes, and more stable occupancy over the long term.
For smaller landlords in particular, HMOs and multi-unit blocks (MUBs) may offer a better balance of yield and resilience than typical single lets. A property generating income from four, five, or more tenants simultaneously mitigates the risk of temporary vacancies. These properties also typically command higher yields over conventional lets, meaning smaller landlords can build financial stability without needing to accumulate multiple properties. Similarly to setting up a limited company SPV, opportunities in HMOs and MUBs, semi-commercial properties, and short-term lets often also require navigation with a qualified adviser such as a mortgage broker with access to specialist lending products.
Beyond mere rental yields, many smaller landlords are looking at property for their longer-term investment strategies. Over 15 or 20 years the property price growth is the main value creator for those looking beyond the short-term. Properties across Scotland and the North are experiencing both high yield and price growth. East Ayrshire in Scotland, for instance, has experienced price growth as high as 12.6% YoY with gross rental yields averaging over 6.5%. With well-structured financing backing these purchases, the rental income more than covers the debt owed.
The Renters’ Rights Act may also create unique opportunities for smaller landlords looking to enter the market with lower risk. As some landlords choose to exit the sector, more properties with sitting tenants are expected to come to market. For smaller investors, purchasing a property with an established tenant can remove much of the uncertainty associated with finding occupants from scratch. And with fewer rental homes available, market rents are likely to remain well supported, even within a framework that places greater restrictions on rent increases during tenancies.
For brokers, the future of buy-to-let will be part-dependent on helping large portfolio landlords expand and part-dependent on helping smaller landlords identify the right funding structures with which to build successful and sustainable long-term investment strategies.
The landlords who succeed in coming years won’t necessarily be the biggest ones. They will be the ones who adapt most effectively to a changing market. For brokers, becoming the adviser who helps them make that transition could prove just as valuable as funding the next acquisition.
