The question is asked as if it had one answer, and it has as many answers as there are landlords, because it turns on the property's net yield, how much of it is borrowed, the landlord's marginal tax rate and what the same capital could earn elsewhere. This page is for the UK landlord asking whether buy to let is still worth it, whether it is worth renting out a house they already own, or whether it is worth being a landlord at all, and it replaces the headline with a method: the four figures to work and how to read them. The rental yield calculator and the rental income tax calculator on this site produce them from your own numbers.
Figure one: the net yield, on today's value
Work the net yield with the real costs of letting and realistic void weeks, and work it on what the property is worth today rather than what it cost, because the question is whether to hold the capital there now. A property whose net yield on today's value is thin is one where the capital is doing less than it could, whatever it cost you.
Figure two: the finance, relieved at the basic rate only
Relief on finance costs for residential lettings is restricted to the basic rate of Income Tax and given as a reduction from the tax bill. For a landlord paying the higher rate of 40% or the additional rate of 45%, that means the mortgage interest is paid partly out of income that has already been taxed at the higher rate, and a highly geared property can show a rental profit on paper and a loss in cash. The tax calculator here applies the restriction; run your own interest through it.
Figure three: the tax at your marginal rate
Rental profit is added to your other income. Between the Personal Allowance of £12,570 and £50,270 it is taxed at 20%; from there to £125,140 at 40%; above that at 45%. A property that is worth holding for a basic-rate taxpayer can be marginal for a higher-rate taxpayer with the same rent and the same mortgage. The answer to whether it is worth being a landlord is, in part, an answer about your other income.
Figure four: what the capital would earn instead
Compare the after-tax cash the property leaves you with what the equity in it would earn in the alternatives available to you, with less work and less risk. If the property wins on that comparison it is worth holding; if it loses, it is being held for growth, and that should be a conscious decision with the selling costs and tax on a sale in view.
Renting out a house you already own
The same four figures apply, with one addition: the alternative is selling and using the proceeds, so the comparison is between the after-tax rental cash and what the sale proceeds would earn. Work the net yield on the house's current value, run the finance and tax through the calculators, and the question answers itself in your figures rather than in anyone else's.
Questions people ask about is buy to let still worth it
So is buy to let still worth it in general?
In general is the wrong frame. It is worth it for a particular property, a particular gearing and a particular tax rate, or it is not; the four figures above decide which.
Is it worth renting out a house rather than selling?
Compare the after-tax rental cash with what the sale proceeds would earn elsewhere. The calculators here give the first figure; the second is yours to judge.
Is it worth being a landlord as a higher-rate taxpayer with a mortgage?
Run the interest through the tax calculator with the basic-rate restriction applied. Many geared properties that work for a basic-rate taxpayer do not at the higher rate; the figure will tell you which yours is.