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 March 2024 - Comments: 281
8:08 AM, 27th November 2025, About 5 months ago
Reply to the comment left by Jack Jennings at 27/11/2025 – 07:43
Exactly my conclusion, remembering that CGT was actually 4% higher (28%) when I sold most of my properties.
When you consider the ink has hardly dried on the RRA, putting the extra 2% on rental income seems more like a deliberate irritant and one final little push to get more churn resulting in more CGT. So much else in the budget is loaded towards bringing in more tax from 2028, it is only logical Reeves needs some hard cash next year onwards.
But this will do nothing to get the 1.5 million homes built, killing landlord demand for new build as new entrant landlords have so much choice from existing stock being sold off. A serious intention to get more rental supply could have been shown by raising the tax on dividends and interest by 2% but leaving rental income unchanged at relatively little cost – as more rental homes delivering 20% and 40% would offset a lower number bringing in 22% / 42%.
As usual tenants will be the losers by these games, originally started by Osborne in 2016.
Member Since December 2024 - Comments: 3
8:48 AM, 27th November 2025, About 5 months ago
Reply to the comment left by SimonP at 27/11/2025 – 05:13
Well, since you’ve asked a question twice, I think you deserve a quick answer.
I’m always keen to confirm my actions were correct – hence me visiting here to keep up to date. I have to say it seems much worse than I ever thought it would be when I began my exit.
Those of you who aren’t going to live forever are going to make your families hate you if you continue down this suicidal route. Now that price growth is grinding to a halt, I can’t see a good way out. It’s certainly not going to end well.
Your tenants get more rights every day, your tax goes up, yet more legislation is launched to harm you. The public hate you the economy is crashing and inflation’s doubled in 18 months. Rent caps are coming next. You are being bullied out of the industry to make way for the multinational corporate landlords .You are in the crosshairs of everyone.
Goodness, even I’m getting depressed and I’m only writing it
On top of that you’re all getting a day near dying each day. I’m spending my proceeds like a drunken sailor on shore leave – yet it seems I’m just exhausting the massive interest amount my post tax profits from 45 sales generates.
That’s why I’ve splashed out on a Spanish finca and qualified for a non lucrative visa. The trouble is my British home is worth more, so I sold that and they have more cash than ever. These are my current problems.
So I’m here, in Andalucia, having a coffee now in full sun at breakfast time. Reading about the rental world in the UK.
Successful business people anticipate the best time to get out.
If my family had handed me all these problems (a property portfolio) upon their death I would have a very mixed feelings.
Member Since February 2022 - Comments: 71
8:50 AM, 27th November 2025, About 5 months ago
Reply to the comment left by SimonP at 27/11/2025 – 05:11
I obviously can’t speak for Mark, but if you’ve been in an industry for decades and it’s been a huge part if your life, it’s pretty obvious why someone would still be interested.
I’ve been a landlord for 26 years, was interested in property since being a kid, and if I exit, will continue to be interested. I love houses and will always be interested.
I left banking 6 years ago after two decades and still actively follow and comment on it.
All seems pretty obvious to me.
Member Since September 2018 - Comments: 3538 - Articles: 5
9:11 AM, 27th November 2025, About 5 months ago
the first things I thought about was it only encourages/more incentive for tenants who are borderline on income, to perhaps give up work and go on benefits full time.
If your insurance says no DSS, and the tenants don’t tell you – how will you know?
Member Since March 2024 - Comments: 281
9:26 AM, 27th November 2025, About 5 months ago
Reply to the comment left by Mark Ripley at 27/11/2025 – 08:48
I can’t disagree with anything you say, I started my exit in 2015 and have just one left (although not quite so overburdened with cash having reached a portfolio of fourteen).
And an advanced prostate cancer diagnosis recently (luckily caught before it spread) made me very thankful I wasn’t still holding the portfolio, none of us are around forever. Picking my ex demo Lotus up tomorrow..
Member Since April 2018 - Comments: 374
10:08 AM, 27th November 2025, About 5 months ago
Reply to the comment left by Reluctant Landlord at 27/11/2025 – 09:11
Most likely proper referencing would reveal that?
Member Since January 2024 - Comments: 3
10:36 AM, 27th November 2025, About 5 months ago
Reply to the comment left by Christopher Lee at 26/11/2025 – 22:42
For starters, CSP1 (S&P500 BlackRock tracker in UK) has returned 100% over the last 5 years. QQQM has returned 106% over same period and the defensive DGRO dividend ETF has returned 57%. Thats annualised average of 17%. The only thing going for property is the ability to leverage however that benefit is no longer present given property prices have gone sideways or stagnated and s24 prevents mortgage offset (unless in LTD structure). Property is still a good asset within a diversified portfolio just not in the UK.
Member Since May 2014 - Comments: 620
10:49 AM, 27th November 2025, About 5 months ago
Reply to the comment left by Jack Jennings at 27/11/2025 – 07:43
Hopefully Nigel is correct and they will be out by 2027.
Member Since October 2013 - Comments: 1642 - Articles: 3
4:36 PM, 27th November 2025, About 5 months ago
Reply to the comment left by Keith Wellburn at 27/11/2025 – 09:26
Like you, I took my London profits in 2016 and 2019, and now have one flat left up North. We are retired and could buy a finca in Spain, but haven’t quite reached that stage, although one of my best friends retired to Portugal, and it does look more and more attractive as this once great Nation sinks to ever more desperate lows. I have just bought a very nice SUV though.
I’ve just updated my Will and left the last rental to my ex-. She’s the joint owner but has done nothing for 14 years, so I thought it would be time she took full responsibility (she’ll have to pay the mortgage anyway!). My children refused it because there’s no equity, no profit (no extra 2% for Thieves), and too much hassle.
Member Since October 2022 - Comments: 205
11:28 PM, 27th November 2025, About 5 months ago
Reply to the comment left by Cider Drinker at 26/11/2025 – 13:49
Frozen for another year, I hear.