70% of landlords anticipate rent rise due to Autumn Budget
As landlord exodus threatens rental supply
The latest research from LegalforLandlords has found that 70% of UK landlords are considering increasing rents following the Government’s latest property income tax changes, while almost half are considering selling properties or reducing their portfolios, raising concerns about the future availability and affordability of privately rented homes.
LegalforLandlords commissioned a survey of 650 UK landlords to examine attitudes towards the Government’s decision to increase property income tax rates for individual landlords by a total of four percentage points from April 2027. Respondents were asked about the expected financial impact of the changes, their future investment plans, rental pricing intentions and confidence in remaining in the private rented sector.
Of those surveyed, 32% said they would increase rents specifically to offset the additional tax burden, while a further 38% said they are considering rent increases. Just 22% said they would absorb the additional cost themselves, while 8% said they did not believe the local rental market would support further increases.
However, the potential impact on tenants could extend beyond immediate rent increases. Almost half (47%) of landlords said they were considering reducing their property investments, including 23% who were considering selling one or more rental properties and 17% who were considering selling their entire portfolio and exiting the market.
The findings also point to a lack of confidence in the future of the private rented sector, with 61% of landlords saying they were either actively planning their exit or at the point of seriously considering it.
Future investment could also be affected, with 45% of respondents saying they had decided against purchasing any more properties as a result of the tax increase. Just 2% said they still intended to expand their portfolio, while 35% said they had not been planning to purchase additional properties anyway.
The expected financial impact of the changes is also significant for many landlords. More than a third (37%) anticipate that the tax increase will substantially reduce their profits, while another 37% expect a noticeable reduction. Only 6% said they did not expect the changes to affect their profitability.
Overall, 88% are unhappy with the additional tax, and 83% of landlords believe the latest changes will make the private rented sector worse for both landlords and tenants.
Sim Sekhon, Group CEO of LegalforLandlords, commented:
“The concern is that tenants could face pressure from two directions. In the immediate term, landlords are telling us that additional taxation and rising operating costs could lead to higher rents. But there is also a longer-term question about what happens if landlords increasingly decide that investing in the private rented sector is no longer financially viable.
If landlords sell their properties and fewer investors enter the market, there is a risk that the supply of privately rented homes will come under further pressure. That could make it harder for tenants to find suitable accommodation.
However, we would encourage landlords who are feeling the pressure not to make any hasty decisions about selling up or leaving the sector. While the financial and regulatory landscape is undoubtedly becoming more challenging, it is important to understand all the options available before deciding that being a landlord is no longer viable. Taking professional advice on finances, tax arrangements and the management of their portfolios could help landlords identify ways to adapt and protect the long-term sustainability of their investments.
A sustainable rental market needs landlords who are confident enough to invest and maintain their properties, as well as tenants who can afford to rent them. We need to consider the wider consequences of policies that risk undermining that balance, while ensuring landlords have the support and advice they need to navigate an increasingly complex market.”
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