With tenant demand staying strong and new regulation on the horizon, many landlords are wondering whether now is the right time to grow their portfolio. If you already own a rental property in Leeds, a second investment could help you boost returns and build long-term financial resilience. But is it the right move for 2025?

The Current Leeds Rental Market at a Glance

The Leeds rental market remains one of the most active in the country. Strong demand continues to outpace supply in many parts of the city, particularly for well-maintained homes in popular suburban areas such as Horsforth, Moortown and Headingley. City centre apartments also remain in demand, especially among young professionals and postgraduates.

According to the latest Rightmove Rental Trends Tracker (Q3 2025), average monthly rents in Leeds have risen by 6.2% year-on-year, with the average rent now standing at £956. Void periods remain low across the board, particularly for properties close to transport links and key employment hubs.

Yield performance also remains healthy. Rental yields in Leeds range between 5% and 8%, depending on property type and location, with smaller terraced homes and apartments typically delivering the highest returns.

Second Property, Second Income Stream

One of the clearest benefits of investing in a second rental property is the opportunity to create a more robust and diversified income stream. By spreading your investment across two properties, you reduce your exposure to income disruption caused by voids, maintenance issues or tenancy changes.

With interest rates still comparatively stable and mortgage products becoming more competitive again, now may be a strategic time to explore buy-to-let finance options. Speak with a mortgage broker to assess affordability and loan-to-value limits based on your current portfolio.

A second property can also support long-term goals, whether you’re building a retirement income, creating intergenerational wealth, or looking to re-invest returns into property improvements or future purchases.

What to Consider Before Expanding

Expanding your portfolio should always be a calculated move. Here are some key considerations to weigh up before committing to a second investment:

• EPC and compliance: Government proposals around minimum EPC ratings could significantly impact buy-to-let landlords in the coming years. Investing in a property with a low EPC may require upfront spending to bring it up to standard.
• Location and tenant demand: Just because your first rental is successful doesn’t mean every location will perform the same. Use local market insight to understand which areas and property types are currently most in demand.
• Ongoing costs: A second property brings additional responsibilities, from maintenance and insurance to licensing, tax and regulatory compliance. It’s important to budget for both expected and unexpected costs.
• Time and management: Managing multiple tenancies can quickly become time-consuming, particularly if properties are in different areas. This is where professional management can prove its value.
• Capital vs income priorities: Consider whether you’re investing for capital growth, rental income, or a mix of both. Different strategies suit different property types and locations.

If you’re unsure about any of the above, a property consultation with an experienced lettings agent or surveyor can help you clarify your position.

How Adair Paxton Supports Landlords Who Scale

Expanding your portfolio doesn’t have to mean doubling your workload. With our fully managed lettings service, landlords can grow their investment with confidence, knowing their properties are being proactively looked after by an experienced and locally-based team.

We work with new and seasoned landlords alike to help identify properties with strong rental potential. If you’re considering an acquisition, we can advise on:

• Rental yield forecasts based on local demand
• EPC and compliance implications
• Tenant demographics and what they’re looking for
• Ongoing maintenance considerations
• Local pricing and long-term area growth potential

Once a property is let, our team handles everything from marketing and referencing to rent collection, property inspections, compliance updates and maintenance coordination. We also provide detailed monthly statements and access to our landlord portal so you can track performance in real time.

Our in-house surveying expertise means we can also support with accurate rental valuations, refurbishment advice, and future-proofing your property for upcoming legislation.

If your current agent isn’t offering this level of insight or support, it may be time to switch.

A Note on Legal and Tax Guidance

Before expanding your portfolio, it’s important to get independent financial and tax advice. Tax rules around second properties and buy-to-let income have changed in recent years, and you’ll want to be clear on how any new purchase affects your income tax, capital gains, and stamp duty liabilities.

While we don’t offer tax advice, we can help ensure your investment decisions are informed by current market conditions, tenant expectations and compliance requirements.

When Might it Not be the Right Time?

For some landlords, holding off may be the wiser move. If you’re still managing ongoing repairs on your current property, have limited cash reserves, or are approaching retirement without a long-term management plan, a second rental might introduce more risk than reward.

It also may not be the right time if your current property is underperforming and you haven’t yet addressed the cause; whether that’s poor presentation, high management costs, or lack of tenant appeal. At Adair Paxton, we’ll always offer honest advice and can support you in reviewing your existing portfolio before expanding.

Final Thoughts

A second rental property can be a smart investment in the right circumstances. It offers the potential for stronger income, increased portfolio resilience, and long-term asset growth – provided you choose the right property, in the right area, and with the right team behind you.

At Adair Paxton, we’ve been supporting landlords in Leeds since 1859. Our lettings and management team is here to offer straightforward advice, accurate valuations, and proactive support every step of the way.

Ready to explore your options?

Speak to our lettings experts or request a free rental valuation today.