London landlords face a more complicated decision than they did a year ago. Rental demand remains strong and average rents are still rising, but mortgage costs, service charges, maintenance expenses and tighter regulation continue to reduce profitability.

At the same time, selling a rental property has become more difficult under the Renters’ Rights Act. Landlords can still recover possession when they genuinely intend to sell, but the process now includes longer notice requirements and restrictions that could prevent the property from returning to the rental market if the sale fails.

Therefore, should London landlords sell in 2026, or is keeping the property and continuing to rent it the better decision?

The honest answer depends on the property’s net income, condition, borrowing costs, likely sale price and the landlord’s long-term plans.

Why This Decision Matters in 2026

The difference between the sales and rental markets is becoming more noticeable.

According to the latest Propertymark Housing Insight Report, the average estate agency branch had 44 properties available for sale in May 2026. However, average rental availability fell to just over 12 properties per letting branch, with approximately eight applicants competing for each available rental home.

This suggests that buyers currently have more choice, while tenants still face restricted rental supply.

The latest Office for National Statistics private rent figures show that average London private rent reached £2,302 per month in June 2026. This represented annual growth of 2.2%. London remains the most expensive English region in which to rent.

Strong rental demand does not automatically mean every property is a good investment. However, landlords should be careful about selling a well-performing rental property without first calculating the full financial and legal consequences.

What Has Changed for Landlords Who Want to Sell?

Since 1 May 2026, Section 21 no-fault evictions can no longer be used. Most private landlords who need possession because they genuinely intend to sell must now use Ground 1A under Section 8.

The Government’s Renters’ Rights Act guidance for landlords confirms that landlords must use an appropriate legal ground and follow the correct possession process.

Under Ground 1A:

• The tenant has a protected period during the first 12 months of a new tenancy.
• The landlord must normally provide at least four months’ notice.
• The landlord must genuinely intend to sell.
• The correct notice, evidence and court process must be followed if the tenant does not leave.
• Restrictions apply to marketing or letting the property again after Ground 1A has been relied upon.

The Government’s Ground 1A possession guidance confirms the 12-month protected tenancy period and four-month notice requirement.

Landlords should also read Primeland Property’s existing guide to the Renters’ Rights Act from 1 May 2026 before taking any action.

Understanding the 12-Month Re-Letting Restriction

One of the biggest risks is what the property industry commonly calls the 12-month re-letting ban.

Where Ground 1 or Ground 1A is relied upon, the Housing Act restricts landlords from marketing or letting the property during a defined restricted period. This period will generally run for 12 months from the relevant date specified in the possession notice or from the date court proceedings begin, depending on how the ground was relied upon.

The precise calculation can be technical. Landlords should not assume that the period simply starts when the tenant leaves.

The legislation restricts landlords from:

• Granting a new short residential tenancy during the restricted period.
• Allowing someone to occupy the property under a paid licence.
• Advertising the property to rent.
• Authorising an agent to market the property for rent during that period.

The relevant restrictions are set out in the Housing Act 1988 provisions introduced by the Renters’ Rights Act. The definition of the restricted period is contained in section 16M.

This matters because a landlord could recover possession, place the property on the market and then fail to find a buyer. Returning the property to the rental market may not be immediately available as a backup option.

Why Selling Has Become Riskier

Recent research reported by Property Industry Eye suggests that 51% of rental properties marketed for sale in 2025 did not complete a sale. The reported failure rate increased to 60% for flats.

This is particularly relevant in London, where many rental investments are flats with service charges, leasehold restrictions and potentially significant major works liabilities.

Propertymark also reports that residential transactions are taking more than 17 weeks on average to progress from offer acceptance to exchange. Furthermore, 84% of member agents reported that properties sold below their asking price during May 2026.

A landlord who serves notice before properly assessing the market could face:

• Several months without rental income.
• Mortgage, council tax and utility payments while the property is empty.
• Legal and possession costs.
• Estate agency and conveyancing costs.
• A lower sale price than originally expected.
• Restrictions on returning the property to the rental market.

For this reason, landlords should obtain a realistic sales valuation before beginning the possession process.

When Keeping the Property May Be the Better Option

Continuing to rent may make sense where the property still produces a reliable net return.

Keeping the property may be appropriate when:

• Rental demand is consistently strong in the local area.
• The property produces positive cash flow after all expenses.
• The mortgage remains affordable.
• Service charges and maintenance costs are manageable.
• The property is in good condition.
• The landlord has no immediate need to release capital.
• The landlord is prepared for the increased compliance requirements.
• The property continues to fit the landlord’s long-term investment strategy.

Landlords should calculate net income rather than focusing only on the headline rent.

The calculation should include mortgage interest, insurance, service charges, licensing, maintenance, compliance certificates, management fees, void periods and taxation.

A property receiving £2,000 per month is not necessarily performing well if most of that income is absorbed by borrowing and operating costs.

When Selling May Still Be the Right Decision

The Renters’ Rights Act does not mean landlords should never sell. It means the decision must be planned more carefully.

Selling may be reasonable where:

• The property produces persistent negative cash flow.
• A mortgage renewal will make the investment unaffordable.
• Service charges or planned major works are excessive.
• The property requires substantial renovation.
• The landlord needs to release capital.
• Too much of the landlord’s wealth is tied to one property or area.
• The likely long-term return no longer justifies the risk and workload.
• The landlord genuinely wants to leave the private rented sector.

A weak investment does not become a good investment simply because selling is more complicated. However, landlords should establish a realistic sale price and understand the possession timeline before committing themselves.

Primeland Property offers both a property sales service and a free sales or lettings valuation, allowing owners to compare the available options before making a decision.

Six Calculations to Complete Before Deciding

Before selling or continuing to rent, landlords should calculate the following.

1. Current achievable sale price

Use recent comparable sales rather than relying on an optimistic online estimate. The asking price is not necessarily the amount a buyer will pay.

2. Net sale proceeds

Deduct the outstanding mortgage, estate agency fee, legal costs, early repayment charges and any applicable tax liabilities.

Landlords should obtain professional tax advice before selling.

3. Current net rental yield

Calculate annual rental income after mortgage interest, service charges, maintenance, insurance, management and expected void periods.

4. Expected future expenditure

Include planned maintenance, leasehold major works, energy-efficiency improvements and compliance costs.

5. The failed-sale scenario

Calculate how long the property could remain empty and how the Ground 1A restricted period would affect the ability to re-let.

6. The alternative use of the money

Consider what the net sale proceeds would be used for. Selling may be less attractive if the money will remain in a low-return account without a clear purpose.

Common Mistakes London Landlords Should Avoid

Serving notice before preparing the sale

Do not begin the possession process until the property has been valued, the likely buyer has been identified and the financial consequences have been calculated.

Assuming the property can be re-let immediately

If Ground 1A has been relied upon, the restricted period may prevent the landlord or agent from marketing or letting the property again.

Setting an unrealistic asking price

More sales stock means buyers have greater choice. Overpricing can result in months of lost income followed by a price reduction.

Comparing gross rent with the sale price

The correct comparison is between net rental return and net sale proceeds.

Ignoring local market conditions

London is not one single property market. Demand, yields, service charges and saleability vary significantly between Whitechapel, Stepney, Mile End, Bow, Stratford, Canary Wharf, Newham and other East London locations.

Could Guaranteed Rent Be an Alternative to Selling?

Some landlords consider selling because they are tired of void periods, rent collection, tenant communication or day-to-day management.

In these circumstances, selling may not be the only option.

Primeland Property’s Guaranteed Rent Scheme in London is designed to provide an agreed monthly payment while Primeland manages the tenancy and day-to-day operation of the property.

This may suit landlords who want to retain the property but reduce their involvement. However, the terms, rent level and responsibilities should be reviewed carefully before entering any agreement.

Landlords who prefer a conventional managed tenancy can also review Primeland’s landlord and property management services.

Final Verdict: Should London Landlords Sell in 2026?

There is no honest universal answer.

Landlords with strong rental demand, manageable borrowing, positive net cash flow and a long-term investment plan may have good reasons to continue renting.

Landlords facing negative cash flow, unaffordable refinancing, substantial service charges or major repairs may still be better served by selling.

What has changed is the risk of making an unplanned decision. A landlord can no longer assume that they can recover possession, try the sales market and simply return the property to rent if the sale is unsuccessful.

The decision should be based on accurate valuations, net figures and a realistic exit plan.

Primeland Property can provide both a sales and lettings assessment, helping landlords compare expected rental income with the likely achievable sale price.

Request a free property valuation or contact Primeland Property to discuss your property.

Frequently Asked Questions

Can a landlord still sell a rental property in 2026?

Yes. A landlord can still sell, but recovering possession from a tenant normally requires the correct legal ground and notice procedure. Ground 1A is available where the landlord genuinely intends to sell.

How much notice must a landlord give when selling?

Ground 1A normally requires at least four months’ notice. A tenant also benefits from a protected period during the first 12 months of a new tenancy.

Can a landlord re-let the property if the sale fails?

Not necessarily. If Ground 1A has been relied upon, restrictions may prevent the property from being marketed or let during the statutory restricted period. The dates should be checked by a qualified legal professional.

Are London rents still increasing?

Yes. ONS figures show that average London private rent increased by 2.2% during the 12 months to June 2026, reaching £2,302 per month. Individual properties and neighbourhoods may perform differently.

Is 2026 a good time to sell a London rental property?

It depends on the property. Increased sales stock gives buyers more choice, while rental supply remains restricted. Landlords should compare the likely net sale proceeds with the property’s current and expected net rental return.

This article provides general property-market information and does not constitute legal, tax, mortgage or financial advice. Landlords should obtain professional advice based on their tenancy, property and financial circumstances.