Buy-to-Let Off-Plan Purchases Hit Lowest Level Since 2013: What Landlords Need to Know

Off-Plan Buy-to-Let Purchases Decline to 33% in 2025

Recent data reveals that buy-to-let off-plan property purchases have fallen to 33% of new home sales in 2025, down from 36% in 2024 — the lowest level since 2013. This decline is largely attributed to the introduction and subsequent increase of the second home stamp duty surcharge, which has dampened investor demand, especially in southern regions such as London, the South East, and South West.

Why This Matters to Landlords

For private landlords, especially those targeting new build properties off-plan, this trend signals a shift in market dynamics. Off-plan purchases often allow investors to secure properties at lower prices before completion, potentially achieving capital growth and securing tenants quickly. The reduction in off-plan buy-to-let activity suggests higher upfront costs and risks, reshaping investment calculations.

Impact of Increased Stamp Duty Surcharge

The second home stamp duty surcharge, increased recently and effective from the end of 2024, adds a significant upfront tax burden on buy-to-let investors purchasing additional properties. This surcharge disproportionately affects buy-to-let investors compared to owner-occupiers, making off-plan acquisitions less financially attractive, particularly in higher-value southern markets.

Effects on Developers and New Build Supply

Developers rely on off-plan sales as a key source of financing. With fewer buy-to-let investors purchasing off-plan, developers face increased financing costs and longer funding periods. This may lead to delays in project completions and a potential reduction in new build supply, which in turn can affect rental market availability and pricing.

Considerations for Different Landlord Profiles

• Single-Unit Landlords: May find off-plan purchases less viable financially due to increased stamp duty, prompting a shift towards existing properties or alternative investment areas.
• HMO Investors: Often reliant on new builds for conversion; delays and higher costs could impact project timelines and profitability.
• Portfolio Landlords: Should re-evaluate acquisition strategies, balancing off-plan opportunities against immediate market stock and financing costs.
• Accidental Landlords: Less likely to be directly affected but should be aware of market changes influencing property values and rental demand.

Practical Next Steps for Landlords

1. Review Investment Strategies: Incorporate higher stamp duty costs into financial models for off-plan purchases and consider alternative acquisition routes.
2. Engage Developers Early: Open dialogue with developers to understand project timelines and potential financing impacts.
3. Monitor Regional Trends: Focus on markets with notable declines in off-plan sales—London, South East, and South West—to identify emerging opportunities or risks.
4. Advise Prospective Investors: If managing or advising others, clearly communicate the current market environment and financing challenges affecting new builds.
5. Plan for Longer Development Timelines: Adjust expectations around project completion and rental availability accordingly.

Benchmarking and Data Gaps

While national data highlights the overall trend, local variations exist. Landlords should benchmark off-plan purchase activity and developer financing conditions through regional estate agents, developer updates, and local market reports to tailor strategies effectively.

How Rentals & Sales Can Support You

Our team offers portfolio reviews incorporating recent tax changes and market trends, compliance audits ensuring your investments meet current regulations, and pricing strategy consultations reflecting new build availability shifts. We can also facilitate conversations with developers and provide local market intelligence to help you navigate these changes confidently.

Compliance disclaimer: This article provides general information and is not a substitute for professional advice. Landlords should consult tax advisors or legal professionals regarding specific stamp duty and investment decisions.