If Universal can get the rights for a Wizarding World land in the UK I think they'd be mad not to build it, with rides unique to this version of a Universal park. As much as I love Lord of the Rings it does not have the demographic reach that Harry Potter does.
JK Rowling's books will continue to be introduced to new generations, the movies continue to be popular and there's the massive TV series which is due to debut in 2026 or 2027 and will delve even more deeply in to the Potterverse than the movies could. It is, of course, a distinctly British IP, exported across the world with astonishing success. We took our two nieces to Orlando when they were young teens and then late-teens and they loved the Wizarding World land(s) more than anything else. No way that are similarly invested in Lord of the Rings, they definitely haven't read the books and I'm not sure they've seen any of the movies. I'd guess they are typical of kids their age, and I don't think the Middle-Earth TV series on Amazon is going to gain much traction with that age range.
I'm pretty sure that a Wizarding World land would be the No.1 draw in any UK theme park. The HP Studio Tour just down the road gets 2 million visitors a year just by itself, that's almost one quarter of the targeted attendance that Universal has said they would like. Perhaps for that reason Universal won't get the rights, so any speculation about whether Universal should include Potter could well be pointless