The Renters’ Rights Act is likely to change landlord investment decisions in 2026 not because it removes the appeal of buy-to-let altogether, but because it changes what landlords now need from a market to justify the risk.
Since 1 May 2026, England’s rental sector has moved into a different legal framework, with Section 21 abolished, fixed-term assured shorthold tenancies replaced by periodic tenancies, rent increases limited to once a year and wider rules introduced around advance rent, discrimination and pet requests. The government’s official landlord overview of the Renters’ Rights Act and its announcement on the 1 May 2026 rollout make clear that the sector is now operating under a more regulated and more compliance-heavy model.
For landlords, that means investment decisions are becoming more selective. The question is no longer only where prices may rise or where rent looks healthy on paper. It is also where demand is deep enough, pricing is still workable and management risk can be absorbed without undermining returns. Manchester matters in that conversation because it still combines relative affordability, strong rents and a large tenant base. Official data showed Manchester’s average house price at £251,000 in February 2026 and average private rent at £1,347 in March 2026. Manchester’s latest local housing data suggests the city remains one of the stronger major-city markets for landlords weighing up the new environment.
According to TK Property Group, the key shift in 2026 is that landlords are likely to focus less on broad optimism and more on operationally resilient locations where demand, rent levels and long-term city fundamentals can support a more regulated investment model.
The investment calculation has changed
The most important impact of the Act is that it alters the balance of control and risk. Landlords still retain legal routes to regain possession in qualifying cases, but the removal of Section 21 and the shift to rolling tenancies mean flexibility is no longer what it was under the old system. The government’s rules now place more weight on formal grounds, compliance and process. Government guidance for landlords sets out those changes in practical terms.
This matters because investment decisions are often shaped by risk tolerance as much as by yield. A landlord choosing where to buy in 2026 is likely to place more emphasis on areas where tenant demand is stable, void risks are lower and tenancy quality is more predictable. Markets that already relied on tight margins or more speculative assumptions may now look less attractive than they did before.
That is one reason the new law may shift decisions away from looser, opportunistic buy-to-let thinking and towards more structured, long-term investing.
Manchester still offers a stronger base than many cities
Manchester may be relatively well placed because it already had many of the characteristics landlords now need. It remains one of the UK’s largest regional cities, its average price is still below the Great Britain benchmark, and its rental market remains large enough to support different tenant types across multiple neighbourhoods. In a more regulated sector, scale and demand depth matter.
That is particularly important when compared with weaker local markets where landlords may face the same legal obligations but without the same rental strength. Manchester’s house price growth of 3.9% year on year in February 2026 was above the North West average of 3.4%, while rents remained high in absolute terms. Reuters’ April reporting on UK house prices helps place that local resilience in a wider national context.
The city also benefits from broader housing and regeneration momentum. Manchester City Council said in January that delivery under its housing strategy had produced what it called its “best year yet”, including significant affordable housing progress across multiple wards. Manchester’s latest housing strategy update reinforces the sense that the city still has a live long-term growth story behind it.
Yield may matter more than short-term flexibility
One likely change in landlord behaviour is that yield becomes even more important. Where the legal framework offers less day-to-day flexibility, the financial case needs to be stronger. Landlords may become less willing to buy in markets where returns are thin and more likely to favour cities where rent levels still give them headroom.
Manchester remains relevant here because it already has a strong income-led profile. That does not remove the effect of regulation, but it does mean investors can justify staying in the market where rents remain meaningful relative to prices. In practice, this could make Manchester more attractive than some higher-priced areas where yields are weaker and the new rules feel harder to absorb.
A more yield-focused decision model may push landlords towards:
- cities with stronger rental demand
- locations where pricing is still below national highs
- assets that can absorb compliance and management costs
- markets where void risk is lower because tenant demand is broader
That kind of logic tends to favour stronger regional cities over more expensive but lower-yielding markets.
Property type and tenant profile could become more important
The Act may also change what kinds of properties landlords favour. In a more regulated environment, many investors are likely to prefer assets with lower friction and steadier tenant profiles. Homes that appeal to professionals, longer-term renters or established household types may look more attractive than stock where turnover, disputes or management intensity are higher.
That does not mean student and city-centre markets disappear from view. But it does mean tenant quality, stability and management practicality may carry more weight in the investment decision than before. Manchester’s advantage is that it offers a broad enough market to support different strategies rather than forcing landlords into one narrow approach.
