Is buy-to-let still worth it for dentists in 2026?

Introduction

There has long been a strong culture within UK dentistry of owning buy-to-let property, whether as a deliberate investment choice or as 'accidental' landlords who have built portfolios over time.

For many dentists, property has traditionally been viewed as a reliable way to build wealth for the future and create an income stream to support retirement. However, the investment landscape for residential landlords has changed significantly. Tax, regulatory and market developments are increasingly affecting returns, risk and the role buy-to-let plays in long-term financial planning.

For dentists already balancing demanding clinical roles and busy personal lives, Rachel Reeves' recent budgetary changes have felt like the final nail in the coffin for holding property purely as a long-term investment for retirement.

Costs and challenges of residential property

Over the last year, several factors have combined to make the traditional buy-to-let model less attractive for many smaller, individual investors - particularly those relying on property to fund their lifestyle rather than active income.

These include:

• Higher ongoing tax on rental income

The 2025 Autumn Budget confirmed a 2% increase in income tax applied to rental profits from April 2027. This means landlords will pay up to 22% (basic), 42% (higher) or 47% (additional) on rental profits, reducing the net income available to reinvest or supplement retirement income.

• Stamp Duty Land Tax (SDLT) increases and property purchase costs

Since April 2025, the threshold from which SDLT applies has reverted to £125,000 and the additional property surcharge on buy-to-lets and second homes has risen from 3% to 5%. These higher upfront costs can make it harder for property investments to deliver meaningful long-term results.

• Capital Gains Tax (CGT) on property sales being higher than expected

CGT rates charged on gains from residential property sales remain elevated (up to 24% for many taxpayers), reducing the capital available to reinvest elsewhere when selling property in later life.

• Renters’ Rights Act and regulatory burden

From 1 May 2026, the Renters’ Rights Act will bring the largest overhaul of landlord/tenant law in a generation. The abolition of 'no-fault' evictions, restrictions on rent increases and increased compliance obligations can add risk and uncertainty - particularly unwelcome as you approach retirement.

• Stagnating house prices

After the post-pandemic boom, house prices in many parts of the UK have shown limited growth. Higher borrowing costs and inflation have dampened returns, making property less predictable as a long-term wealth-building tool.

Together, these changes can significantly squeeze net rental yields and challenge the role of buy-to-let as a dependable retirement asset.

Tax treatment depends on your individual circumstances and may be subject to change in the future.

A stress check for dentists

As you move closer to retirement, simplicity, predictability and time freedom often become more important. However, residential property can feel like a second job.

Tenant management, void periods, maintenance issues and compliance requirements can add stress and distraction, especially when you consider:

• Tenants' rights increasing
• Tax eating into overall investment returns
• Rising operational and compliance costs
• Capital tied up in investments that aren’t readily accessible

For many dentists, this prompts a reassessment of whether buy-to-let is still delivering value compared to other ways of building wealth for the future.

An alternative way to grow retirement capital

If you're considering selling a buy-to-let property, one alternative use for the sale proceeds could be commercial investments.

Following a property sale, it's common for a significant amount of cash to end up sitting in bank accounts earning little interest and gradually being eroded by inflation.

We all know we can maximise our pension options, but what if you require the cash in the short term? Investing some of the proceeds from a property sale could allow your capital to grow over the medium to long term, without the ongoing management and involvement that property ownership often demands.

How commercial investments can support long-term planning

• Designed for business funds

Commercial investment accounts allow your company (such as a dental practice or property Special Purpose Vehicle) to invest surplus cash into professionally managed funds, rather than leaving it sitting in a business bank account.

• Different levels of risk

You can choose from a range of investment options, from more cautious approaches to those focused on long-term growth. This means your investments can be matched to how much risk you’re comfortable taking and what you want the money to achieve.

• More flexibility

Unlike buy-to-let property, commercial investments don’t involve tenants, repairs or compliance issues. While investing is best suited to longer-term plans (typically five years or more), money can usually be accessed if needed, without the delays and costs associated with selling property.

• Growth over time

Any income generated by investments can be reinvested, allowing your money to grow year after year. Over time, this can have a powerful effect on overall returns.

Please remember that the value of your investments can go down as well as up, and you may get back less than you put in.

Time to rethink the role of property in your retirement plan?

For some dentists, buy-to-let still works well - particularly where borrowing is low and the portfolio is well-managed. For others, selling property and reinvesting the capital may provide a better balance of growth, flexibility and peace of mind as retirement approaches.

The key question isn't whether property or investments are "better", but whether your current approach:

• Still supports your long-term retirement goals
• Matches your attitude to risk
• Fits the time and energy you want to commit
• Works alongside your wider tax and pension planning

Professional advice can help you assess whether property remains the right fit, understand the implications of selling and ensure surplus capital is structured effectively for the future.

Please note that most buy-to-let mortgages are not regulated by the Financial Conduct Authority (FCA).

Planning for life after dentistry

At Wesleyan Financial Services, we start by understanding what matters most to you - not just now, but in the years leading up to retirement and beyond. Our Specialist Financial Advisers can help you review your current position and build an investment strategy that supports your wider financial and retirement goals.

To explore your options in more detail, book an appointment today. Advice charges may apply.