Are you one of the many private landlords who have invested in property instead of a pension? Perhaps you run a buy-to-let as an alternative to the stock market, hoping to create a cash pot for the future?
Ten, even five years ago, that may have been a tangible plan – regular income from the rent and long-term property appreciation for later – but the landscape has changed so dramatically that many ‘pension’ landlords have quit.
Anecdotal evidence is one thing but now a new report by wealth and asset management group, Rathbones, has sent a warning to landlords banking on their buy-to-let for retirement.
Less for your pension pot
Its annual ‘Don't Bet the House’ report is sobering reading. Property performance was found to have lagged behind inflation and stock market returns, limiting the ability for landlords to use equity in their twilight years. It said ‘once adjusted for inflation, the average UK home was worth less in 2025 than it had been in 2016.’
As a professional property buyer, investor and large-scale landlord, we know it’s a numbers game and the context matters. Rathbones quoted Nationwide’s UK house price growth of just 1.7% between May 2025 and May 2026. In contrast, the consumer price index, including owner occupiers' housing costs, rose by 3% in the same monitoring period.
Stock markets are steady
And how about the stock market? Rathbones said a portfolio made up of 25% UK equities and 75% international equities increased by 11.8% before dividends. It’s not a one-off performance either.
Open a simple trading account and investors can enjoy steady returns. When looking at a decade-long average, investors have enjoyed 10-12% of annualised returns if invested in the S&P 500, or 6-8% in the UK’s FTSE 100.
Interested in interest
Gains are attractive even with High Street and online banks. Cash ISAs currently have interest rates in the region of 5%. For those who are willing to become a ‘rate tart’ - moving money around and taking advantage of deals – returns are even higher. For example, at the time of writing, Santander was offering 8% AER/gross (variable) for those opening a regular saver account.
Yields are diminishing
But we’re missing the killer statistic: net yield. It’s the key driver in buy-to-let – the profit a landlord is making, expressed as a percentage of the property’s value, after all expenses are paid. Average rental yields for England and Wales dropped from 8.1% in Q1 to 7.8% in Q2 2026, according to Fleet Mortgages.
Weighing up the bigger picture
As a stand-alone set of figures, it’s not terrible but it’s not pretty against the wider backdrop of poor house price appreciation, high mortgage rates, above target inflation and the cost of void period rising almost 13% in a year. The numbers simply aren’t adding up for many landlords, especially since the scrapping of full mortgage interest relief.
Effort in, gains out
Then there’s the cost that can’t be measured in monetary terms. Invest in a traditional pension, an ISA, a managed fund or simply a savings account and it feels relatively simple compared to property investment. Deposit cash and let it do its thing – no inventories, no boiler call outs at 1am, no evictions.
Red tape ahead of retirement
The Renters’ Rights Act 2025 has taken compliance and legislation into a new stratosphere. Extra red tape, greater fines and heightened risk all need navigating on an almost daily basis. It’s not exactly the hands-off retirement plan many landlords started with.
Looking ahead, landlords will have to pay to belong to a new ombudsman and database, or become an illegal landlord. Awaab’s Law and a Decent Homes Standard? Coming soon. And the mandatory EPC rating will increase to a C in 2030. The Government thinks limiting a landlord’s energy improvement investment to £10,000 is doing them a favour but that kind of spend seriously eats into the pension pot.
Let’s not forget the plans of Andy Burnham. As LandlordBuyer recently wrote about, our new Prime Minister doesn’t appear to be a fan of private landlords. If he eventually scraps council tax and stamp duty in favour of an owner-paid land tax, landlords could pay 0.96% of their buy-to-let’s value every year. We’re sure it’ll be a fee incorporated into the Tenant Fees Act 2019, so investors will have to raise the rent to cover costs, or suck up the tax.
Unless you’re a professional investor or a build-to-rent mogul able to navigate the compliance driven lettings market, the appeal of funding retirement with a buy-to-let is diminishing fast.
Cash out and reinvest now
If you feel the simplicity and cash liquidity of an ISA is the way to plan, or want to return to the comfort of a traditional, managed pension, contact LandlordBuyer. We’re helping landlords exit the market before it tightens any further.
Sell with sitting tenants
Our strength lies in buying tenanted properties. With us, you can sell without eviction or disturbing your tenants. We’ll take over the tenancy, completing the purchase in as little as six weeks, if required. You’ll get cash in your bank account to reinvest how you see fit.
Start a buy-to-let sale by requesting a cash offer, or contact us if you need tailored advice.