Buying or Selling: How Landlords Are Positioning for 2026

As the UK property market moves toward 2026, landlords are responding in markedly different ways. Some are choosing to exit the sector, trimming portfolios or selling entirely, while others are quietly acquiring new stock and positioning for the next phase of the cycle. This divergence is not a contradiction. It reflects a market that is becoming more selective and more disciplined as economic conditions stabilise and long term fundamentals reassert themselves.

Why Some Landlords Are Choosing to Sell

The reasons behind recent sales are well documented. Higher interest rates have increased borrowing costs, while changes to taxation and regulation have reduced margins for landlords who relied on leverage or thin yields. Industry data suggests that a large proportion of rental properties sold over the past two years were owned by landlords with one or two properties, often purchased during periods of low interest rates and financed at higher loan to value ratios.

According to recent sector surveys, small portfolio landlords now account for the majority of exits, while larger and more established operators have remained comparatively stable. For many sellers, the decision is driven less by sentiment and more by arithmetic. Refinancing at higher rates, rising compliance costs and reduced post tax income have prompted a reassessment of whether individual properties still meet long term objectives.

Why Others Are Buying More Property

At the same time, a different group of landlords is taking the opposite view. Investors with stronger balance sheets, lower leverage and a longer investment horizon see the current environment as one that favours careful acquisition rather than rapid expansion. Transaction volumes remain below historic peaks, yet demand for rental homes continues to exceed supply across much of the UK.

Data from national rental indices shows vacancy rates remaining low in many regional cities, with average rents continuing to rise year on year despite affordability pressures. This imbalance between supply and demand has reinforced confidence among buyers who focus on well located property with strong tenant appeal.

As Alan Evans, Operations Director at Doran Estates, explains,
“What we’re seeing is not a loss of confidence in property but a shift in behaviour. Landlords who are buying now tend to be more selective, more informed and very clear on why a particular asset fits their long term strategy.”

A Market That Is Filtering Rather Than Falling

What is emerging is not a retreat from buy to let but a filtering process. The market is gradually shedding speculative ownership and favouring landlords who operate with clearer strategies and stronger fundamentals. Properties that are inefficient, poorly located or misaligned with modern tenant expectations are more likely to change hands, while well specified homes in areas of consistent demand remain tightly held.

This evolution mirrors trends seen across other asset classes, where investors increasingly prioritise resilience and predictability over short term gains. In property, that shift places greater emphasis on quality, management standards and long term demand rather than headline yield alone.

The Role of Interest Rates and Policy Expectations

Looking ahead to 2026, expectations around interest rates and policy stability continue to influence landlord decisions. While rates remain higher than the historic lows of the previous decade, forecasts suggest a more settled environment that allows investors to plan with greater confidence. This predictability supports more realistic modelling of returns and reduces the reliance on aggressive assumptions.

At the same time, although regulatory change remains part of the landscape, there is growing expectation that the pace of reform will slow, giving landlords a clearer framework within which to operate. For experienced investors, this stability is often more valuable than short term incentives.

Positioning for the Next Phase

The choice between buying and selling in 2026 is therefore less about market timing and more about alignment. Landlords whose portfolios no longer reflect their risk tolerance or financial goals may continue to exit selectively. Those with access to capital and a long term outlook are more likely to remain active, focusing on assets that meet modern standards and support sustained demand.

For buy to let investors, the coming year is likely to reward discipline rather than scale. Location, energy performance, build quality and tenant demand will matter more than volume. The market is offering fewer easy wins, but greater clarity for those prepared to approach it thoughtfully.

As 2026 approaches, the buy to let sector appears neither broken nor booming. It is becoming more measured, more selective and more closely tied to fundamentals. Landlords are taking different paths because their circumstances differ, and that divergence is shaping a market defined by quality rather than quantity.

For investors willing to adapt, property remains a relevant part of a diversified strategy. The key is not simply deciding whether to buy or sell, but understanding how each decision fits within a more disciplined and mature market.

Photo by Altaf Shah