Every January the forecasts arrive, and every January they say roughly the same thing: cautious optimism. 2026 is no different on paper. What has actually changed is the cost of money, and that is the variable that moves investor returns more than any headline price forecast.

The mortgage picture has genuinely improved

The Bank of England has walked the base rate down through 2026, with most analysts expecting it to settle between 3.0% and 3.75% by year end. That has fed through to buy-to-let pricing. Five-year fixes are converging on the 4.5% mark, product choice has widened, and the sharpest improvements have been for borrowers with smaller deposits.

The most striking shift is in limited company lending. For years, buying through an SPV cost you a premium of one to two percent over a personal-name mortgage. That gap has all but closed, with limited company products now routinely below 5%. It is no coincidence that 63% of landlords surveyed in January said they intend to buy through a company in future. The structure that used to be the preserve of portfolio investors is now the default. If you are weighing it up, our guide on limited company versus personal name walks through the real numbers.

Yields still point North

The arithmetic that has driven our buying for years has not reversed. The North East, the North West and the Midlands continue to post the strongest gross yields in the country, because entry prices are lower and tenant demand is deep. The UK average gross yield sits close to 6%, but well-chosen stock in our core cities clears that comfortably.

This is why our pipeline remains weighted to Manchester, Liverpool and Birmingham rather than the South. A two-bed in a Greengate tower like Obsidian, or a New Cross Central apartment in Ancoats, does something a London flat at three times the price cannot: it pays its own way from month one.

The headwinds are real, and we will not pretend otherwise

Two things should temper the optimism.

First, tax. The additional-property stamp duty surcharge sits at 5%, and the two-percentage-point rise to property income tax rates announced for April 2027, taking the basic, higher and additional rates to 22%, 42% and 47%, erodes net yield further. For higher-rate taxpayers holding in personal name, the maths is tighter than it was five years ago. This is precisely why structure matters so much now.

Second, regulation. The Renters' Rights Act came into force on 1 May 2026, ending Section 21 and converting tenancies to periodic. We think the long-term effect is to professionalise the sector and reward investors who hold quality stock and manage it properly. In the short term it adds compliance the casual landlord will not want, which is part of why some are selling. That is an opportunity for those who are staying.

Our view

2026 is a better year to buy than 2024 or 2025 were, for one simple reason: cheaper debt restores the gap between rental income and borrowing cost that makes leverage work. It is not a boom, and anyone selling you one is selling you something. It is a market where disciplined buyers, financing through the right structure, in cities with real demand, will do well. That has always been the job.

If you want our current buy box and the developments we are actively placing capital in, speak to the team. We will tell you what we are buying and, just as importantly, what we are not.