The UK’s buy-to-let property market is undergoing significant transformation. Amid rising interest rates and regulatory changes, some landlords are choosing to exit the sector. However, for astute investors, 2026 could represent a year of strategic opportunity — particularly in regional cities that are primed for rental growth.
According to a combination of industry data and insights from LandlordBuyer, landlords who adapt swiftly to the evolving market landscape may still secure substantial returns — if they know where to focus.
Buy-to-let lending is projected to reach £42 billion in 2026, marking an 11% rise on 2025 figures.
Average UK house prices are anticipated to grow by 4%, bolstered by increasing market confidence and easing inflation, while rental prices are expected to rise by 3.5% in 2026, contributing to a cumulative 17.6% increase by 2029.
The latest research shows that the top regional yield performers are Blaenau Gwent (11.4%), Redcar & Cleveland (9.5%), and Derby and Newcastle (6–8% yields).
Birmingham: The emerging capital of buy-to-let?
One of the most promising cities for landlords in 2026 is Birmingham. The city benefits from major infrastructure and urban regeneration projects, high tenant demand from young professionals and students, and forecasted rental price growth of 3.5%.
Jason Harris-Cohen, managing director of LandlordBuyer, commented: “Birmingham’s rental market is poised for continued growth through 2025 and 2026, underpinned by strong demand, limited supply, and ongoing urban development. For landlords and investors, the city presents an opportunity to achieve both attractive rental yields and capital appreciation. As Birmingham continues to evolve, it solidifies its status as a leading destination for property investment in the UK.”
