Autumn Budget 2025 – Landlord Reactions
In somewhat good news for landlords, Chancellor Rachel Reeves decided against extending National Insurance to rental income in the Autumn Budget.
However, the Office for Budget Responsibility (OBR) warns that landlords will still be worse off under this Budget.
While National Insurance on rental income was not introduced, the Budget did raise tax rates on dividends, property, and savings income by 2 percentage points, which will increase the tax landlords pay on rental income and raise an estimated £500 million a year.
Successive eroding of private landlord returns will likely reduce the supply of rental property
In an embarrassing turn for the government, the OBR leaked key measures of the Budget, which it described as a “technical error,” while Ms Reeves blamed the OBR for the “serious error.”
The OBR document said: “The measures announced in this Budget reduce returns to private landlords, following various measures over the past 10 years that have also reduced returns.
“This successive eroding of private landlord returns will likely reduce the supply of rental property over the longer run, risking a steady, long-term rise in rents if demand outstrips supply.”
The OBR also mentioned changes to mortgage interest relief, the stamp duty land tax surcharge and capital gains tax allowances, as well as the introduction of the Renters’ Rights Act.
Rachel Reeves blames landlords
Industry experts have welcomed the Chancellor’s decision not to extend National Insurance on rental income.
Critics had warned that such a move could trigger property sell-offs and worsen the housing crisis for renters by pushing up rents.
While the Chancellor chose not to proceed with this change, the Autumn Budget still proved to be controversial for landlords.
Ms Reeves addressed fairness in the tax system, saying that a landlord with an income of £25,000 would pay nearly £1,200 less in tax than a tenant with the same salary because no National Insurance is charged on property, dividends, or savings income.
She said: “It’s not fair that the tax system treats different types of income so differently, and so I will increase the basic rate and higher rate on property, savings, and dividend income by 2 percentage points, and the additional rate on property and savings by 2 percentage points.”
Other measures in the Budget include:
The Freezing of personal tax thresholds for an additional three years from 2028-29
There will be a new High Value Council Tax surcharge of £2,500 on properties over £2m and a surcharge of £7,500 on properties valued over £5m
The two-child benefit cap will be abolished
The Conservatives’ ECO scheme surcharge on energy bills will be scrapped, saving the average household £150 per annum.
The OBR’s inflation forecast has reduced next year’s predicted inflation by 0.4% due to the affordability measures introduced in this Budget. This should increase pressure on the Bank of England to further bring down the Bank Base Rate.
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Industry reactions to the "Mansion Tax"
Member Since January 2011 - Comments: 12205 - Articles: 1401
1:49 PM, 26th November 2025, About 5 months ago
It is striking that the OBR has now said out loud what many landlords have been experiencing for years. If returns keep being chipped away, supply will fall. When supply falls, rents rise. That is not ideology, it is basic economics.
The Chancellor may have stepped back from charging National Insurance on rental income, but raising the tax rates on property, savings and dividends still moves things in the same direction. Every percentage point added to the tax bill makes more landlords question whether they can justify staying in the sector, especially with the Renters’ Rights Act landing at the same time.
My bigger concern is the long-term outcome. If the OBR is already predicting a steady decline in supply, what does the market look like in five years. Will today’s measures accelerate the shift from private landlords to institutions, or will we simply see a smaller sector with higher rents and fewer options for tenants.
Interested to hear how other landlords are viewing this budget. Are the numbers still workable for you, or is this another push towards selling up or restructuring.
Member Since December 2023 - Comments: 1576
1:49 PM, 26th November 2025, About 5 months ago
I will not be worse off. My tenants will be worse off.
Any news on LHA?
Member Since March 2019 - Comments: 73
2:02 PM, 26th November 2025, About 5 months ago
I will be increasing my rents to cover my extra tax and if the tenant is unhappy I will be selling and stop providing properties for this government I am sick of working hard taking risks going without to invest ,
I have not had a holliday for 50 years!!!!! so fck em
Member Since January 2011 - Comments: 12205 - Articles: 1401
2:13 PM, 26th November 2025, About 5 months ago
Reply to the comment left by paul kaye at 26/11/2025 – 14:02
If it does go that way Paul i highly recommend you read the article I’ve linked to below
https://www.property118.com/which-properties-sell-first/
I hope it proves useful
Member Since April 2025 - Comments: 9
2:25 PM, 26th November 2025, About 5 months ago
Well, what’s the difference between paying 2% extra NIC or 2% tax which is what she’s done?
Member Since July 2016 - Comments: 156
2:38 PM, 26th November 2025, About 5 months ago
Reeves said today that its unfair that a landlord on 25k pays less tax than her tenant on the same amount. But let’s call out that lie. Most landlords have mortgages, but interest must be ignored when calculating profit. So 25K rent, but 10k of mortgage interest means a true income of 15k, yet the landlord will be taxed on the whole 25k. Even if the landlord can claim a 20% tax credit, ignoring interest at the front end of the calculation, artificially pushes many into a higher rate, or paying more income at the higher rate.
Still, every cloud has a silver lining. Finally Reeves has given me the kick up the backside I need to send rent increase notices to 14 of my tenants. My next task of the day.
Member Since May 2024 - Comments: 73
2:39 PM, 26th November 2025, About 5 months ago
Reply to the comment left by Valerie Hollylee at 26/11/2025 – 14:25
The difference is, its not the 8pc she suggested a few weeks ago. However, if there is little push back on the proposed 2pc surcharge, watch this become 4, then 6 in coming years.
This Gov are idiots, Kemi gave a good pushback- so fair play to her.
They are not the Labour party, they are the Welfare and Layabouts party.
Member Since January 2023 - Comments: 317
2:41 PM, 26th November 2025, About 5 months ago
Reply to the comment left by Valerie Hollylee at 26/11/2025 – 14:25
Very ‘clever’ of her to put it on income tax as even retired LLs have to pay that. Now she has set the precedent of the case for a LL earning £25K in property income vs tenant she has started the equalisation / fairness narrative so with three more budgets to go I expect her to add 2% every year until it hits the magic 8% NIC rate.
Labour don’t understand laffer curve or supply / demand economic just wedded to welfare ideology.
Member Since January 2024 - Comments: 3
2:43 PM, 26th November 2025, About 5 months ago
I’ve been selling ever since Labour were elected. Why on earth do people think property is still a viable investment in the UK when you can just park your cash in a 3 fund portfolio ie, S&P, DGRO and QQM and receive 15% CAGR.
No sitting tenants, no leaking bathrooms..
Member Since May 2014 - Comments: 89
2:47 PM, 26th November 2025, About 5 months ago
Reply to the comment left by Crouchender at 26/11/2025 – 14:41
Spot on. A lot of landlords are coming up to retirement age, so this extra tax will apply till death/sale of assets. I’ll be personally marginally better off cf if she’d added NIC… but then significantly worse off when I retire. Another nail in the coffin for prs…