The Autumn Budget 2026 has introduced further tax changes for landlords, but does that mean buy-to-let is no longer a worthwhile investment? For anyone considering buying a rental property in Nottingham, or looking to expand an existing portfolio, there are several factors worth considering before making a decision.
While the latest changes mean landlords need to pay closer attention to their finances, buy-to-let can still offer opportunities for those who choose their properties carefully and take a long-term view. The key is understanding the costs, researching rental demand and finding a property that has the potential to deliver a suitable return.
Here’s what Nottingham landlords and prospective property investors need to know following the Budget.
What did the Autumn Budget 2026 change for landlords?
One of the main announcements affecting landlords was a further two-percentage-point increase in income tax rates on property income from April 2027. This follows a two-percentage-point increase announced in the previous Budget.
From 6 April 2027, the property income tax rates for landlords in England will be:
- Basic rate: 24%
- Higher rate: 44%
- Additional rate: 49%
These rates apply to taxable property income, rather than the total rent received. The actual amount of tax payable depends on a landlord’s individual circumstances and the relevant tax rules.
For example, a landlord with £10,000 of taxable property income would pay £400 more tax under a 24% rate than under a 20% rate, assuming all other factors remain unchanged.
The impact will vary between landlords. Those who own property personally may be affected differently from landlords who hold their investments through a limited company. Company ownership has its own tax implications, particularly when profits are withdrawn, so it is worth seeking professional tax advice before changing how a property is held.
Although the changes need to be factored into investment calculations, they do not automatically make buy-to-let unprofitable. A property with suitable rental income, manageable costs and strong tenant demand may still offer an attractive long-term opportunity.
Is Nottingham still a good place to invest in buy-to-let?
Nottingham offers a range of opportunities for property investors, with two major universities, established employment centres, transport connections and a varied housing market. These factors help create demand for rental accommodation from different types of tenants.
Smaller properties in convenient locations may appeal to working professionals, while areas around the universities can attract student tenants. Family homes in established residential neighbourhoods offer another option for landlords looking for longer-term tenancies.
The best investment will depend on your budget, objectives and the type of tenant you want to attract. Some landlords prioritise rental income, while others are also interested in the potential for long-term capital growth.
As with any property investment, location and purchase price are important. Researching local rental prices, comparing similar properties and understanding the demand in a particular area can help you identify opportunities with the potential to deliver a suitable return.
Our guide to buy-to-let property in Nottingham provides further information for anyone considering investing in the local rental market.
How to work out whether a buy-to-let property is profitable
Before purchasing a rental property, it is important to understand how much income it could generate and what it will cost to own and manage. Gross rental yield is a useful starting point, although it does not tell you how much money you will keep after expenses and tax.
Gross rental yield is calculated by dividing the annual rental income by the purchase price and multiplying the result by 100.
For example, imagine buying a property for £150,000 and renting it out for £950 per month.
- Purchase price: £150,000
- Monthly rent: £950
- Annual rental income: £11,400
- Gross rental yield: 7.6%
This provides a useful starting point when comparing potential investments. However, the £11,400 is income before expenses, tax and mortgage costs.
To understand the potential return, you should account for costs such as:
- Mortgage interest and borrowing fees
- Letting agent and property management fees
- Landlord insurance
- Repairs and routine maintenance
- Safety checks and licensing costs where applicable
- Periods without tenants
- Tax on taxable rental income
You should also consider the initial costs of buying the property, including stamp duty land tax where applicable, legal fees, surveys and any refurbishment required before it can be let.
Once these costs are included, you can make a more informed assessment of the likely return. A property with a slightly lower gross yield may still be a better investment if it needs less work, attracts reliable tenant demand and has lower ongoing costs.
It is also sensible to allow for unexpected expenses and changes in mortgage rates where relevant. Building some flexibility into your calculations can help you assess whether the investment remains viable if costs increase or the property is temporarily empty.
How to choose the right buy-to-let property
Finding the right property is one of the most important parts of making a buy-to-let investment work. Rather than focusing solely on the cheapest purchase price or the highest advertised yield, consider how well the property matches local tenant demand.
Start by researching the types of properties people are looking to rent in your preferred area. Compare achievable rents, look at how similar properties are presented and consider the features that matter to your intended tenants, such as transport links, parking, local amenities and access to employment.
The condition of the property is equally important. A property that requires significant renovation may offer an opportunity to add value, but you need to understand the full cost of the work and whether the resulting rental income justifies the investment.
Think about your long-term plans, too. If you want to build a portfolio, you may prioritise properties that can generate consistent income and be managed efficiently. If you are buying a single investment, you may have different priorities depending on your available capital and financial objectives.
Taking the time to research the market before committing to a purchase can help you avoid costly mistakes and focus on properties that fit your investment strategy.
Should landlords increase their rents after the Budget?
Some landlords may need to review their rents in light of rising costs and the upcoming tax changes. However, any increase should be based on the local rental market, the property’s condition and the rules governing the tenancy.
Charging more does not automatically mean a property will generate a better return. If a proposed rent is significantly above comparable properties, it could make the property harder to let or retain tenants.
Landlords should research similar properties in the same area and consider what tenants are realistically willing to pay. A local letting agent can provide useful insight into current demand, comparable rents and the likely appeal of a property.
Regular reviews can help landlords understand whether their rental income remains competitive. Any rent changes should be handled in accordance with the applicable legal requirements.
Should you keep your existing buy-to-let property or invest in another?
The Budget may prompt some landlords to review their existing portfolios, but the latest tax changes do not necessarily mean that selling is the best option. For many investors, it makes more sense to assess the performance of each property and consider its future potential.
If a property generates a suitable return, attracts reliable tenants and has manageable running costs, keeping it may continue to make financial sense. Landlords who are considering expanding their portfolios should apply the same careful approach when assessing additional purchases.
Reviewing rental income, maintenance expenses and management arrangements can help identify opportunities to improve the performance of an existing investment. In some cases, better management or a more realistic approach to budgeting may make a meaningful difference.
If a property is no longer meeting your objectives, selling may be worth considering. However, this decision should take account of selling costs, any potential capital gains tax and the alternative uses for the money.
Every investment is different, so it is worth reviewing the figures rather than making a decision based solely on the Budget headlines.
Could buying through a limited company make buy-to-let more attractive?
Some landlords choose to purchase property through a limited company rather than owning it personally. The tax treatment differs, and company ownership may be worth investigating depending on your circumstances, plans for future investment and how you intend to use the profits.
However, operating through a company is not automatically more tax-efficient for everyone. Corporation tax, the cost of withdrawing profits, mortgage availability, lending terms and administrative expenses all need to be considered.
Moving an existing property into a company can also have significant tax and transaction costs, potentially including capital gains tax and stamp duty land tax. It should not be treated as a straightforward way to avoid the latest changes.
If you are considering buying through a limited company, or changing the ownership structure of an existing property, seek advice from an accountant or tax specialist who understands property investment before taking action.
How professional property management can help landlords
Managing a rental property effectively is an important part of protecting your investment. Avoidable periods without tenants, delayed maintenance, poor tenant selection and missed compliance requirements can all affect the return a property generates.
A letting agent can help with marketing a property, finding and referencing tenants, arranging inspections, collecting rent and coordinating maintenance, depending on the service selected.
For landlords who prefer not to manage these responsibilities themselves, a fully managed service can reduce the time involved in running a rental property. The cost should be included in your calculations, but professional management may be worthwhile if it helps you manage the property efficiently and provide a good experience for tenants.
Benwell Daykin provides letting and property management services across Nottinghamshire, supporting landlords with both tenant-find and fully managed options.
Find out more about our letting agents in Nottingham and the services available to landlords.
Is buy-to-let still worth it in 2026?
Despite the latest Budget changes, buy-to-let can still offer an attractive opportunity for landlords who choose their properties carefully and take a long-term view. The key is to understand the costs, research local rental demand and invest in a property that has the potential to deliver a suitable return.
Nottingham offers a range of opportunities for property investors, from properties suited to working professionals and students to family homes in established residential areas. The right choice will depend on your budget, investment objectives and the type of tenant you want to attract.
For those considering their first buy-to-let property, the Budget is a reason to plan carefully rather than automatically rule out investing. Understanding the likely rental income, ongoing expenses and tax implications before buying can help you make a more informed decision.
Existing landlords may also find opportunities to improve the performance of their portfolios by reviewing rents, managing costs and ensuring their properties remain attractive to tenants.
There is no single answer that applies to every landlord. However, with careful research, realistic financial planning and the right property, buy-to-let may still form a worthwhile part of a long-term investment strategy.
Talk to Benwell Daykin about your Nottingham buy-to-let
Whether you are considering your first investment or looking to expand your portfolio, Benwell Daykin can help you understand the Nottingham rental market and explore the letting and property management services available across Nottinghamshire.
If you would like to discuss your investment plans, rental potential or property management options, contact Benwell Daykin estate agents to speak to the team.