A new report from insurance provider Simply Business highlights the growing challenges landlords are facing amid shifting legislation and rising expenses. The survey of nearly 2,000 landlords paints a bleak picture for the sector, with many expressing concerns over the future of the buy-to-let market under the newly elected Labour government.

According to the report, a significant 71% of landlords believe the government’s policies will negatively impact the buy-to-let market, with over half of them (51%) stating they expect the impact to be “very negative.” This sentiment is fuelled by frustration over what many landlords describe as confusing and constantly changing regulations, with 69% citing this as their biggest challenge—an increase from previous years.

“Landlords are clearly feeling the strain of navigating an increasingly complex regulatory landscape,” the report concludes, calling on the new government to address these concerns as a priority.

Despite the difficulties, rental demand remains strong. However, only 41% of landlords surveyed believe letting property is still a worthwhile investment. Nonetheless, 62% do not plan to sell their properties in the next 12 months, reflecting a cautious optimism about the market’s future.

The report also touches on the government’s Renters’ Rights Bill, which introduces higher standards for rental properties. While most landlords support the idea of improving the market, 69% fear the legislation will make evictions more costly and time-consuming. Furthermore, 62% expect that the removal of Section 21—a rule that allows landlords to evict tenants without reason—will push more landlords to exit the market.

Rising costs have emerged as another pressing issue for landlords, with 38% identifying it as the biggest threat to the rental market. Of particular concern are mortgage repayments: 35% of landlords have seen monthly payments increase, up from 31% in 2023, with 10% of those reporting increases between £500 and £1,000 per month.

Adding to the financial strain are the new Energy Performance Certificate (EPC) regulations, which require rental properties to meet a minimum rating of C. Half of the landlords surveyed indicated they would need to make improvements to meet this standard, and over a third (34%) expect to spend up to £10,000 to comply with the new rules.

Bea Montoya, Chief Operating Officer at Simply Business UK, commented on the findings: “For landlords, 2024 has been defined by rising costs, ever-changing legislation, and the election of the new Labour government. The resilience of landlords – and the market – should not be underestimated, but many are struggling to navigate these challenges.”

Montoya emphasized the importance of government support, calling for clear guidance on future legislation and financial assistance through schemes and grants. “Landlords are a vital part of the health and stability of the UK housing market, and must be treated as such to ensure we can create an environment that serves both landlords and tenants,” she added.

With uncertainty mounting and costs continuing to rise, the report suggests that the government faces a difficult task in regaining the trust of landlords and ensuring the long-term viability of the rental market.