Is Now the Time for Landlords to Sell Up? An Industry View on East Midlands Property Market Dynamics in 2026

As we move through 2026, UK landlords and property investors are facing a pivotal decision point. After years of tax changes, rising operating costs and increased regulation, many are reassessing whether continuing to let property still delivers an acceptable return. A growing number are asking the same question: is now the right time to sell buy-to-let property in the UK? 

Jennifer at Woodstead Sales and Letting, Nottingham explains in this article. Having worked across investment portfolios and tracked performance trends across Nottinghamshire and the wider East Midlands for decades, there is now a stronger case than at any point in recent years for landlords to consider exiting the sector while market conditions remain favourable. 

Market Background: Rising Prices but Uneven Growth 

Across the UK, house price growth remains steady rather than spectacular. Most mainstream forecasts expect UK house prices to rise through 2026, typically within a 2 to 4 percent range. 

However, national averages hide important regional differences. 

Northern and Midlands property markets continue to outperform the South, showing greater resilience and buyer demand. 

In Nottinghamshire, 2025 data shows house prices rising by approximately 4.8 percent year on year, exceeding both East Midlands and national averages. 

Average rents in Nottingham increased by over 7 percent year on year, reflecting sustained rental demand. 

This regional performance matters. Landlords in Nottinghamshire and the East Midlands are holding assets that have delivered genuine capital growth rather than stagnating values, creating a window of opportunity to sell at strong price 

Profitability vs Pressure on Landlords 

Despite several challenging years, the private rented sector has shown signs of resilience. 

Rental yields in the East Midlands remain among the strongest in the UK, typically ranging between 6.5 and 7.5 percent. 

Industry surveys suggest around 87 percent of landlords remain technically profitable. 

However, headline yields do not tell the full story. Once rising costs, taxation and compliance obligations are deducted, net profits are often far slimmer than they appear. 

Headwinds That Reduce Net Profit 

Capital growth is not guaranteed in every location or property type, with some segments such as flats underperforming in recent years. More significantly, structural cost pressures are eroding landlord returns. 

Higher taxes on rental income and capital gains have materially reduced margins compared with a decade ago. 

Increased compliance requirements, including Making Tax Digital, have added administrative burden and professional costs, particularly for smaller landlords. 

Stamp duty surcharges on additional properties remain in place, and many local authorities continue to introduce second-home premiums. 

In practical terms, a growing share of rental income is absorbed by tax, regulation and compliance, steadily reducing net returns even where rental demand is strong. 

Tenant Demand Is Strong but Not Enough to Offset Constraints 

Rental demand across the East Midlands remains robust, supported by strong employment centres and large student populations. Limited supply continues to place upward pressure on rents. 

However, tenant affordability has clear limits. While rents have risen, increases are moderating and, in real terms, rental growth is now broadly aligned with wage growth in many areas. This restricts future income growth while costs continue to rise. 

Key Pros for Landlords to Continue Letting 

• Stable rental demand, particularly outside London where affordability supports longer tenancies 

• Above-average rental yields in Nottinghamshire and the East Midlands 

• Continued, albeit moderate, capital growth forecasts for 2026 

Key Cons and Reasons to Consider Selling 

• Rising costs from taxation, compliance and borrowing reduce net returns 

• Increasing operational and legal complexity, especially for small and medium portfolios 

• Improving sales market conditions as buyer confidence returns 

• Capital may be more effectively deployed outside a heavily regulated buy-to-let sector 

Why Now Might Be the Right Time to Sell 

Buyer Confidence Is Improving 

Mortgage rates have stabilised and begun to ease, bringing buyers back into the market. Increased online activity and enquiry levels point to renewed confidence, particularly among owner-occupiers. 

Competitive Prices in Regional Markets 

Nottinghamshire and the wider East Midlands continue to experience steady price growth. While not overheated, the market is liquid and competitive, allowing well-priced properties to achieve strong values. 

Risk Reduction 

Selling now allows landlords to reduce exposure to increasing regulation and cost pressures while capital values remain well above recent lows. 

Liquidity and Portfolio Strategy 

For landlords with smaller portfolios, 2026 offers an opportunity to sell without distress, realising gains built up over the past decade in regions that have consistently outperformed national averages. 

Why the Renters’ Rights Bill Makes 2026 a Sensible Exit Point for Many Landlords 

The Renters’ Rights Bill represents the most significant structural change to the private rented sector in a generation. While positioned as tenant protection, it fundamentally alters the balance of risk, control and profitability for landlords. 

For small and medium landlords in particular, the Bill reshapes the risk-reward equation. When combined with higher taxes, increased compliance and an improving sales market, it strengthens the argument for selling while demand remains strong and exit options remain flexible. 

Taken together, the provisions of the Renters’ Rights Bill reduce landlord control, increase legal exposure and compress future returns, making 2026 a logical point for many to reassess their position. 

A Balanced but Timely Sell Signal 

There is no universal answer. Landlords with scale, tax-efficient structures and professional management may continue to operate successfully. However, for many, 2026 represents a strategic window where: 

capital values remain strong 

buyer demand is improving 

rental demand is high 

but regulatory and cost pressures are accelerating 

For landlords in Nottinghamshire and the East Midlands in particular, current conditions support achieving good prices in a strengthening market without waiting for increasingly uncertain future returns.