Landlord confidence falls to 23% despite 85% staying profitable, Pegasus Insight data shows

Only 23% of landlords say they feel confident about their letting business, down from 63% in 2011, according to Pegasus Insight data reported by Landlord Today on 4 November 2026. That matters not because it creates any new legal duty, but because confidence shocks often lead to rushed decisions on refinancing, incorporation, sales and succession — and that is where compliance failures tend to start.

The same study says 85% of landlords remain profitable, and arrears have fallen. This is not a story about widespread losses or an immediate rent collection crisis. It is a story about landlords feeling less positive about the direction of travel despite still making money. For London property teams, that distinction matters: profitable landlords may still choose to sell, stop expanding or move stock into a company if they expect tax and regulation to become less favourable.

The tax backdrop needs checking against primary sources

The report links the confidence drop to cumulative policy changes, including the restriction of finance cost relief introduced from 2017 and fully in place from 2020. It also refers to more recent Budget measures, but the source summary does not specify which measures are shaping sentiment. Do not assume a new tax change affects your portfolio without checking the actual HM Treasury Budget papers and HMRC guidance. A sensible next step is to ask your accountant to confirm in writing whether any current measure changes your tax position for 2026/27, and whether the outcome differs for personally held property and limited company ownership.

An older landlord base raises succession and handover risks

The study puts the average landlord age at 63. In practice, that raises the likelihood of disposals, gifting, probate events and informal handovers to relatives or advisers. In London, where a single buy-to-let can carry a high capital value and a significant latent CGT exposure, an unplanned exit can be costly. If a landlord dies or loses capacity without clear instructions in place, routine tasks such as gas safety renewal, deposit paperwork, licence renewals and tenancy decisions can be missed within weeks.

The study also says average portfolio size and the number of buy-to-let mortgages have declined. That suggests some landlords are deleveraging or shrinking rather than gearing up to buy. For heavily mortgaged London portfolios, the risk is not just reduced appetite; it is a mortgage mismatch during restructuring. If you transfer a property into a company, add directors, remove borrowers or sell a unit to clear debt, lender consent may be required and early repayment charges may apply. The source gives no standard figure for those charges, and rightly so: they are lender- and product-specific, so your broker needs to check each loan rather than make a portfolio-wide assumption.

Incorporation can help some landlords, but it is not just admin

One clear trend is the rise in incorporation. The study says 24% of landlords hold at least one property in a limited company, and incorporated landlords now hold a larger share of their portfolios in companies. That may make tax sense for some, but it also adds another layer of compliance. If you operate through a company, the basics are not optional: Companies House filings, statutory accounts, corporation tax returns, proper dividend records and governance documents all need to be kept up to date.

For London landlords considering incorporation now, the risk is treating it as a paperwork exercise rather than a disposal and reacquisition. Depending on the structure, you may be dealing with CGT, financing changes, conveyancing, lender underwriting and, in some cases, higher-rate SDLT on the company purchase. The source material does not provide a current SDLT worked example, so get one prepared before any transfer is agreed. If the property is in an HMO or a borough licensing area, check whether the licence needs to be varied or whether a fresh application is needed when ownership changes. Borough rules differ, and London councils do not use one standard template.

Existing compliance duties still apply during any restructure or sale

There is no new statutory deadline in this confidence report, but existing landlord duties still apply in full. That includes EPC requirements, annual gas safety checks, five-year electrical safety inspections where required, tenancy deposit protection rules, Right to Rent checks, smoke alarms, carbon monoxide alarms, and HMO or selective licensing where applicable.

In London, licensing risk is particularly acute because borough schemes vary widely. A landlord planning a sale or restructure in boroughs such as Newham, Waltham Forest, Brent or Southwark should check whether a licence transfer is possible, whether a new application is required, or whether a management change has to be notified before completion or handover.

Three practical checks to prioritise now

If confidence remains weak, older landlords may compress a two-year plan into two months after a tax announcement, rate movement or family event. That is when title documents are missing, company records are out of date, insurance sits in the wrong name, and tenancies are handed over without a clean compliance pack.

Three actions stand out:

1. Within the next 14 days, ask your accountant and broker for a written stress test covering mortgage rates, voids, repairs and tax under your current ownership structure.
2. Before the end of this quarter, list every property by legal owner, lender, licence status, EPC date, gas safety date, EICR date and deposit scheme so you can spot any mismatch between ownership and operational records.
3. If the lead landlord is over 60 or the portfolio is family-run, book a succession and exit planning meeting within 30 days to cover wills, powers of attorney, probate readiness and disposal sequencing.

A profitable portfolio can still lose value quickly if a buyer or lender spots licensing gaps, undocumented deposits or missing safety certificates during due diligence.

General information only, not legal or tax advice; take advice for your property, ownership structure and borough.