Landlords are facing a widening squeeze from compliance, maintenance and financing costs, with a fresh warning that smaller investors are finding it harder to keep rental property profitable.
New comments published on 27 May by property specialist LandlordBuyer argue that the pressure is no longer just about mortgage rates or headline policy changes. The company says licensing fees, insurance costs, repair inflation, voids and looming energy efficiency bills are combining to weaken returns, especially for one and two-property landlords.
For landlords, the timing matters because these are not one-off hits. They are recurring costs that can stack up quickly at a point when many owners are already deciding whether to refinance, invest more capital or sell.
Smaller landlords face the sharpest margin squeeze
LandlordBuyer said the hidden cost problem is hitting smaller landlords hardest because they have less scale to absorb repeated compliance and maintenance bills. That includes selective licensing fees, higher insurance premiums and the growing cost of repairs.
The firm also pointed to the government’s own estimate that future EPC upgrades could cost an average of £5,400 per rented property. Landlord Knowledge has already reported that one in four landlords plan sales over EPC C rules, while a separate finance report found gilt market pressure could still feed through into landlord mortgage costs.
Exit pressure is building beyond mortgage rates
Jason Harris-Cohen, managing director of LandlordBuyer, said many owners had expected property to deliver stable long-term returns but are now dealing with a steady build-up of costs they did not plan for. In his view, the pressure is coming from several directions at once – compliance, repairs, insurance, licensing and borrowing.
The underlying issue for landlords is that these costs do not just reduce headline yield. They can also delay upgrades, reduce appetite to hold older stock and make disposal more attractive where a property needs ongoing capital spend. GOV.UK’s 2025 update on improving the energy performance of privately rented homes remains a key reference point because it sets out the policy path behind the EPC debate.
Landlords still need to separate noise from real risk
Not every landlord will reach the same conclusion. Portfolio operators with stronger cashflow and newer stock may be able to absorb higher running costs more easily than part-time investors with older homes in licensed areas. But the warning is still relevant because cost pressure is becoming more layered, not less.
This follows Landlord Knowledge’s report on professional landlords staying in the market despite Renters’ Rights Act pressure, which showed the sector is not moving in one direction. The latest comments suggest the dividing line may increasingly be between well-capitalised landlords who can keep investing and smaller owners whose margins are running out.
What this means for landlords
- If you own older stock: price in likely EPC, repair and licensing costs before your next refinance or rent review.
- Watch for: local licensing renewals, insurance increases and any firm government move on EPC standards, as these can shift profitability quickly.
- Bottom line: the biggest risk for smaller landlords may be the pile-up of ordinary costs rather than one dramatic rule change.
Editor’s view
Landlords can usually cope with one big cost shock. What pushes some out of the market is the drip-drip effect of many smaller ones arriving together.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 27 May 2026
Sources: LandlordBuyer, GOV.UK
Related reading: One in four landlords plan sales over EPC C rules
