Buy-to-Let UK – Is It Worth It In 2026?

Landlords faced a difficult year in 2025. In fact, since at least the 2022 mini budget, landlords and property investors have had to contend with rising costs, tightened lending criteria, and nervous high street banks.

Not to mention the bleak sentiment that’s surrounding BTL investors themselves. The wider market is struggling with a lack of suitable supply for both buyers and renters. Unfortunately, some of the blame for this has been levied – often unfairly – on landlords.

Still, there were signs that this sentiment went into reverse last year. In 2024, Keir Starmer suggested landlords should not be considered working people[1]. But, in late 2025, he seemed to change his mind, saying the majority of landlords are respectable and reasonable[2].

The establishment may be finally starting to realise that landlords play a key role in the economy, but there are still road bumps to overcome in the coming months. At the same time, there will be plenty of opportunities.

We will look over the pros and cons of the UK buy-to-let market, both currently and over the coming months. There are both opportunities and risks ahead for brokers and borrowers, and everyone needs to be prepared.

Is buy-to-let worth it in 2026? Let’s find out.

→ Dive deeper into financing, opportunities and risks in buy-to-let investing with our Complete Guide to Buy-to-Let Mortgages.

Buy-to-let UK – the pros

Let’s start with the positives of buy-to-let in the UK. Despite all the challenges of recent years, the current BTL market is in surprisingly good health. Rental yields hit a record high of 6.6% towards the end of last year[3], while 89% of surveyed landlords said they were making a profit from their letting’s activity. This was the highest level recorded since 2019.

Looking ahead, landlords appear keen to keep this momentum going. Separate analysis revealed that two-thirds of landlords are planning to either expand or refurbish their portfolios over the next 12 months[4].

The economic picture is also rebounding. The Bank of England felt comfortable enough to cut the base rate at its final meeting last year, and the majority of analysts expect interest rates to be cut a few more times in 2026[5].

What’s more, new rental records are set to be hit in 2026, with supply and demand imbalances continuing to put upwards pressure on rents[6]. Yields are also expected to remain high across the UK, especially in the northern regions[7].

There is also plenty of evidence suggesting many landlords are proactively adapting to the challenges they’re facing in the market, rather than accepting defeat. More landlords are investing in BTL properties via limited companies, likely in an effort to cut their costs[8]. In fact, BTL limited companies became the single biggest business type in 2025, with over 400,000 firms registered[9]. What’s more, many of these professional landlords are using specialist BTL products to support and enhance their portfolios[10].

Still, despite a surprisingly optimistic outlook, we must not lose sight that 2026 brings with it many changes which may knock some investors off balance. We must be aware of what’s on the way.

Buy-to-let UK – the cons

There is no getting away from the fact that, even with how profitable investing in buy-to-let in the UK can be, it is becoming increasingly difficult to operate within the industry. Rising costs play their part, as do administrative burdens. But arguably, it’s the legislative backdrop that is having the greatest impact on the current market.

The Renters’ Rights Act became law in late 2025[11], and we now know that the first tranche of changes will come into play from May 1[12]. The biggest changes involve the abolishing of “no-fault” evictions, ending fixed contracts, limiting rent increases, banning “bidding wars”, and more.

These changes have evidently spooked many landlords. Some 24% of landlords indicated plans to leave the market because of these reforms, according to research from the NRLA[13]. Moreover, in anticipation of the changing landscape, 27% began enforcing stricter referencing criteria, 11% had taken out rent guarantee insurance, and 7% were requiring guarantors more frequently.

It’s inevitable that we’ll see many beleaguered landlords abandon the market in the months leading up to May. But this will create opportunities for those who are willing to stick around, and potentially secure a bargain.

The opportunities in 2026

Exiting landlords will need to sell to someone. As the May deadline looms, desperation may rise, and so prices could come down. There could be opportunity to invest in properties offered at substantial discounts.

We’re already seeing evidence of this. Average prices in prime central London fell by 4.3% over the prior year, according to Knight Frank[14]. Across Britain, house prices fell unexpectedly by 0.4% in December, according to Nationwide’s latest data[15].

Indeed, property investors should keep the entirety of the UK in mind when considering their 2026 options. Simply Business, when looking at the number of new landlord insurance policies bought in 2025 compared to 2024, found that Manchester takes the top spot for the fastest-growing buy-to-let area[16]. Liverpool, Leicester, Leeds, and Birmingham also rank highly.

In terms of property type, HMOs could prove very tempting in 2026[17], and Savills argues there are more opportunities available in the rural sector than ever before[18]. Not to mention the commercial market that could see an influx of interest from residential landlords seeking profitable alternatives[19].

What’s important to remember is that we don’t know what we don’t know. There are pros and cons of buy-to-let in 2026, but we can only truly prepare for what we know is on the way. As should be obvious by now, the property market can be beset by unexpected announcements, legislative shifts, and unforeseen troubles in the blink of an eye.

There will be a way forward for all of these, but they’ll require support from lenders who can adapt to a dynamic economy, and political climate. At Market Financial Solutions, we never stopped lending throughout all the ups and downs of 2025. With renewed funding lines behind us, alongside an expanded workforce, we’ll continue to do so in 2026.