BTL investors capitalise on softer housing market

Property investors are picking up BTL bargains amid the slower housing market.

Research by estate agency brand Hamptons, using Connells Group data, shows BTL investors made the most of their chain-free position and increased cash reserves in July to push for steep price reductions.

In July 2026, landlords accounted for 14.1% of all home purchases in Great Britain, up from the 12.4% year-to-date average.

Investors became more ambitious with their offers, with the average landlord paying just 88.7% of the initial asking price in July.

The research shows that 56% of offers from investors during July 2026 were at least 10% below the seller's initial asking price — the highest proportion since the first Covid lockdown in April 2020. This is also up from 48% in June 2026 and 45% in July 2025.

Investors buying in cash looked to push for an even harder deal, with 63% of offers from cash-backed landlords in England & Wales last month coming in at least 10% under the initial asking price.

In contrast only 25% of offers from first-time buyers and 27% of offers from home movers came in at more than 10% below the first asking price.

BTL investors have also been benefiting from improved rental growth.

The report shows annual rental growth for new lets hit 1.9 in July, taking the average rent back above £1,401 per month.  This is the fastest pace of rental growth recorded for new lets in 19 months.

The pickup in rental growth has primarily been driven by Southern England.

Newly agreed lets in outer London are also now back above the £2,000 per month mark, having fallen below this level in early 2025.

However, annual rental growth for all rental homes, including both new lets and ongoing tenancies, has continued to edge down, falling from 2.2% in June to 2.1% in July.

David Fell, lead analyst at Hamptons, commented: "When the market slows, seasoned investors rarely stand on the sidelines for long.

“With homes taking longer to sell and chains proving fragile, landlords are using their liquidity and chain-free status to maximise their leverage when it comes to agreeing a price.

“In a market where certainty has become more valuable, these benefits tend to be worth more than in hotter markets where sellers often have multiple options on the table.

“While higher borrowing costs continue to weigh on investment returns, landlords with cash or low levels of borrowing are finding that a slower market is creating opportunities to purchase at significantly lower prices than would have been possible a few years ago.”

David added that while growth is still running below inflation, July still marked the eighth straight month in which the pace of rental growth has risen.

He said: “Although these hikes may not be as large as in previous peak years, for landlords, the re-emergence of an upward trajectory in rents provides a counterweight to higher borrowing costs.”