Property is still one of the most popular ways to make money in the UK, but the rules have changed a lot. Higher taxes, new renting laws and mortgage rates well above the old lows mean the easy wins are gone. In this guide I explain how to make money in property in the UK in 2026, which strategies still work and the costs you need to plan for.
The UK Property Market in 2026
The average UK house price is around £273,000, according to the ONS, while the average monthly rent has reached about £1,400. Rents are still rising, up 3.8% over the year, because demand from tenants is strong.
On the other side, the Bank of England base rate is 3.75% and markets expect the next move to be up. So borrowing is not cheap. That makes picking the right strategy, and the right area, more important than ever.
5 Ways to Make Money in Property
Step 1: Buy to Let
Buy a home, rent it out and collect a monthly income while the property, hopefully, rises in value. It is the classic route. However, profits are tighter than they were, so the numbers need to work from day one. Our guide to buy to let in 2026 shows how to run them.
Step 2: Houses in Multiple Occupation
An HMO is rented room by room to several tenants. Because you collect several rents from one building, the income is usually much higher than a normal let. The trade off is more work, extra licensing and stricter safety rules.
Step 3: Buy, Refurbish and Refinance
Buy a run down property below market value, do it up, then remortgage it at the new, higher value. If it goes well, you pull most of your cash back out to use on the next deal. It is a powerful way to grow, but the refurb costs and valuations must be right.
Step 4: Flipping
Flipping means buying, renovating and selling for a profit. It can make a big return quickly. However, profits are taxed as income or capital gains, and a slow market can leave you paying a mortgage on an empty house.
Step 5: Property Without Buying a House
Real estate investment trusts let you invest in property through the stock market, from as little as a few pounds. Many yield 5% to 7%, and you can hold them tax free in an ISA. Our guide on how to invest for income explains how they fit in a portfolio.
The Costs That Eat Into Property Profits
| Cost | What it means in 2026 |
|---|---|
| Stamp duty surcharge | An extra 5% on top of normal rates for second homes and buy to lets in England |
| Mortgage interest | Individual landlords only get a 20% tax credit, not full relief |
| Income tax on rent | Rates on property income rise by two percentage points from April 2027, to 22%, 42% and 47% |
| Capital gains tax | 18% for basic rate and 24% for higher rate taxpayers |
| Running costs | Letting fees, repairs, insurance, safety checks and empty months |
These costs are why many landlords now buy through a company. Companies pay corporation tax on profits and can deduct all their mortgage interest. Our guide to limited company buy to let covers the pros and cons.
The Renters’ Rights Act and What It Means for You
Since 1 May 2026, landlords in England can no longer use section 21 no fault evictions. Tenancies now roll on month to month, and rent can only be raised once a year with two months’ notice. You can still regain your property, for example to sell it or move in, but only through set legal grounds.
For good landlords with good tenants, little changes day to day. However, it does make careful tenant checks and proper paperwork more important than ever.
Tips to Make Money in Property in 2026
First, buy on yield, not hope. Areas where rents are high compared with prices, such as parts of the North West and North East, often work far better than the South East.
Second, stress test every deal. Check it still makes money if the mortgage rate rises by two percentage points or the property sits empty for a month or two.
Third, add value. Extensions, loft conversions and smart refurbishments let you create equity rather than waiting for the market to do it for you.
Is Property Still a Good Way to Make Money?
Yes, but it is now a business rather than a side bet. If you research the area, run the numbers properly and plan for tax, you can still make money in property in the UK. For many people, though, a REIT in an ISA delivers property income with a fraction of the hassle.
Not sure where to start with a smaller budget? Our guide on how to invest in property with £50k or less breaks down the options.
This article is part of our UK Property Guide, where you will find every related article in one place.