Higher landlord taxes mean higher rents – NRLA

Tax rises affecting landlords which are due next year, could feed through into higher rents for tenants already under pressure.

The warning comes from the National Residential Landlords Association, which found that 46% of landlords plan to increase rents over the next 12 months because of the changes.

That’s because, from April 2027, income tax rates on property income will rise by two percentage points, following an announcement in last autumn’s Budget.

The poll also found that 35% of landlords expect to raise rents by more than they had previously planned, while 33% said they intend to sell one or more properties as a result of the tax rise.

Look in the mirror

The NRLA’s chief executive, Ben Beadle, said: “If the government is serious about easing cost of living pressures, it needs to look in the mirror.

“To be increasing the cost of providing rental housing, whilst keeping housing benefit support frozen, simply makes no sense.

“Renters will be left picking up the bill for the Chancellor’s tax hikes.”

He added: “The government needs to scrap plans that risk pushing rents higher and making it harder for people to find a home.

“And for those proposing rent controls as the answer, they do nothing to address the root cause of higher rents – rising costs and a chronic shortage of homes to meet demand.”

OBR points to tax issues

The Office for Budget Responsibility has previously warned that the policy would lead to higher rents.

Housing Minister Matthew Pennycook has also recently admitted that tax increases by the last government were the main driver of landlords selling properties.

The NRLA says taxes on landlords have grown further under the current government.

The issue comes as housing benefit remains frozen, leaving tenants who rely on support to access the private rented sector facing tighter budgets and greater difficulty sustaining tenancies.

The Institute for Fiscal Studies has warned that the government’s tight fiscal position is ‘no excuse for a system that creates uncertainty for renters and unfairness between local areas’.