Buy-to-Let Sale Losses Rise 32% to £1.15bn: What Landlords Should Learn Before Selling
Landlords reported £1.15 billion in losses on residential property sales in 2024/25, according to HMRC data obtained by Bowmore Wealth Group. Jonathan Stephens examines what the figure does and does not show, and why a sale decision must be based on the individual property’s value, income and exit prospects.
By Jonathan Stephens, Managing Director, SmartLandlord
Published 29 October 2026
Buy-to-let investors reported £1.15 billion in losses on residential property sales in the 2024/25 tax year, up 32% from the £870 million recorded a year earlier.
Bowmore Wealth Group obtained the figure from HMRC through a Freedom of Information request. It relates only to sales where an investor crystallised a capital loss. It does not include profitable disposals, homes still held by landlords or the number of investors involved.
That distinction matters. The data shows that more investors completed sales which generated a capital loss. It does not show that buy-to-let as a whole lost £1.15 billion.
The story is about the properties some investors have chosen to exit. SmartLandlord examines what that reveals about resale values, borrowing pressure and the point at which retaining an asset can become more expensive than selling it.
Read Bowmore Wealth Group’s analysis of the HMRC data: Buy-to-let property sale losses rise 32% to £1.15bn
The £1.15bn does not describe every landlord sale
The figure shows only the loss-making side of the market.
A landlord who sold a flat after service charges rose and its resale value weakened may have reported a capital loss. Another landlord may have sold a long-held family house at a gain. The first transaction contributes to the £1.15 billion total. The second does not.
The data also does not explain why each property was sold. A mortgage expiry, lower lender valuation, family circumstances, major works or a change in portfolio strategy can all bring an asset to market. Bowmore links the increase to slower price growth, higher borrowing costs and regulation. Those pressures are relevant, but the HMRC figure cannot identify the reason behind an individual sale.
It does show that some landlords have chosen to crystallise a loss rather than continue with the costs and risks of ownership. That is an asset-specific decision, not a forecast for the wider buy-to-let market.
A loss exists only when the sale completes
A valuation below the original purchase price may be concerning. It is not, by itself, a capital loss for tax purposes.
The calculation is made when the property is sold. Sale proceeds are measured against the allowable costs of acquiring, improving and disposing of the asset. These can include the purchase price, Stamp Duty Land Tax, legal and selling fees, and qualifying capital improvements. Ordinary maintenance and decoration are generally treated differently.
The relevant question is not whether the property is below its previous peak. It is what a sale would return after debt and transaction costs, compared with the income, costs and risks of continuing to hold it.
An allowable capital loss can usually be set against gains in the same tax year or carried forward. That can matter for tax planning. It does not restore the capital or cash lost on the property.
Read the Government’s guidance on Capital Gains Tax losses: Capital Gains Tax losses
Read how to calculate a property gain or loss: Work out your gain when selling property
The pressure is greatest where resale value and finance have weakened
The reported loss data does not identify the type of property sold. The wider market data, however, shows why some assets are more exposed than others.
The Office for National Statistics recorded annual UK house-price growth of 0.9% in the year to August 2026. London prices fell by 2.2%, while the average London flat fell by 5.0%.
That does not make every flat a poor investment, nor does it mean values are falling everywhere. It does underline the importance of a property’s own resale market.
An apartment with high service charges, a short lease, major works ahead, or a large volume of competing stock can be much harder to sell than a home with broad owner-occupier demand. The original developer price matters little if a future buyer, valuer, or lender will not support it.
Debt can make that position more urgent. At the end of a fixed-rate mortgage, a landlord may face a lower valuation, tougher rental stress testing or the need to inject additional cash. In that situation, selling at a loss may form part of a financing decision, rather than a simple judgement on where prices go next.
Read the latest ONS house-price and rent data: Private rent and house prices, UK, October 2026
Read SmartLandlord’s Buy-to-Let Mortgage Guide: Buy-to-Let Mortgage Guide
Retaining a property can be right. So can selling it
The £1.15 billion figure doesn’t give a single answer for every landlord.
The relevant question is whether the asset still works. A property with reliable rent, manageable borrowing and a credible pool of future buyers may justify a longer hold, even during a weaker resale period. That case is harder to make when retained income is thin, service charges are rising, and the next lender is unlikely to provide the required borrowing.
Waiting for a better market can be sensible when the property has a sound role in the portfolio. It is a weaker argument where the investor is delaying a refinancing shortfall, major-works bill or sale that will become harder later.
The assessment needs to be made while there is still a choice. A fixed-rate expiry, poor valuation, or urgent need for capital can remove that choice.
The exit begins with the original purchase
The eventual sale market is shaped long before an investor decides to exit.
Homes that suit local tenants and ordinary owner-occupiers have a wider potential buyer base when they come back to market. They don’t depend on another landlord accepting the same rent, service charge, and finance assumptions.
SmartLandlord focuses on the more liquid and in-demand parts of the residential market, where working tenant demand overlaps with established owner-occupier demand. Homes close to employment, transport, schools and everyday amenities can serve both audiences.
A high advertised yield does not create resale demand. Nor does a discount from an ambitious original price. The investor needs to know the market supports the purchase price, income remains viable after ownership costs, and the property can appeal beyond the original investment proposition.
Read SmartLandlord’s Buy-to-Let Guide 2026: Buy-to-Let Guide 2026
Read How to Choose Your First Buy-to-Let Property: How to Choose Your First Buy-to-Let Property
SmartLandlord View
“The £1.15 billion figure is not a call for every landlord to sell. It reminds us that an investment cannot rely on rising values to offset weak income, high service charges, or difficult finance. Investors need to know what each property is worth today, what it retains after every cost and whether it still justifies the capital tied up in it.”
Jonathan Stephens, Managing Director, SmartLandlord
SmartLandlord’s advice
Before selling, establish the likely sale price, mortgage redemption figure, transaction costs and tax position. Compare that result with the income the property is likely to retain, the costs ahead and the alternative use of the capital.
A falling valuation is not always a reason to exit. Equally, holding a property for longer does not repair an asset with weak income, difficult finance or a limited resale market.
Landlords should obtain qualified tax advice before completing a sale or claiming a capital loss.
SmartLandlord
SmartLandlord helps investors assess existing assets, planned sales and acquisition opportunities against current value, income, finance and long-term resale demand.
Contact SmartLandlord to discuss an existing property, a planned sale or your wider portfolio strategy.
Disclaimer: This content is provided for general information and market commentary only and does not constitute financial, investment or tax advice. Property investment carries risk, and property values and rental income can go down as well as up. Past performance is not a reliable indicator of future results, and any forecasts or projected returns are illustrative only. Investors should conduct their own due diligence and seek independent professional advice before making investment decisions.
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