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 October 2022 - Comments: 205
11:32 PM, 27th November 2025, About 5 months ago
Reply to the comment left by Mick Roberts at 26/11/2025 – 14:51
You now pay an extra 2% on dividends instead. I haven’t done the math on that one yet.
Member Since September 2015 - Comments: 1013
8:11 AM, 29th November 2025, About 5 months ago
Reply to the comment left by Crouchender at 26/11/2025 – 14:41
….. notably though is the 2% doesn’t apply to corporate Landlords. Just as Section 24 didn’t apply to corporate Landlords.
Member Since March 2024 - Comments: 281
8:27 AM, 29th November 2025, About 5 months ago
Reply to the comment left by Gromit at 29/11/2025 – 08:11
Remembering that REIT holders will be impacted by extra withholding tax on the PIDs (dividends) of 2% as whilst they are corporate in nature they don’t pay Corporation tax. Although the ability to put REITs into an ISA offers the ability to effectively get residential property income tax free on REITs investing in that sector as well as those with commercial property portfolios is a bonus.
I note Grainger, the residential property corporate, recently converted to REIT status.
Member Since October 2024 - Comments: 197
9:00 AM, 29th November 2025, About 5 months ago
Reply to the comment left by Crouchender at 26/11/2025 – 14:41
That’s correct. With NI, the retired people would not have contributed. So decided on 2% tax on all the property owners and dividends, which will affect landlords and businesses. The PAYE employees are very well of as it is, just get paid regular income. They know they would get regular income. They have no risks, no hassle from the tenants to resolve various issues, compliances, paying for licenses etc.
Is Reeves stupid that she cannot see the damage she has done? Is she totally clueless that she is behaving in such childlike manner, not understanding economics or businesses? How dare she compare landlords income with the regular employees. Clearly she wishes the landlords to close their businesses. She within Labour party feel that landlords will sell but at least 60% properties will be sold to other landlords. They will get 100% CGT and only loose 40% to owner occupier. After all their aim is to squeeze money out of landlords for their increased spending. As if it is landlords responsibility to fund UC, more than 2 children, civil service increases, asylum seekers hotel costs, filling the black hole etc.
I have started selling in 2018. One completing within 2 weeks. This one is sold to owner occupier. I wish to sell 3 more within a year. As there are tenants, may have to sell to a property investor or may have to give notice to them. One of them has told me, that if I sell they will leave, as they don’t know who next landlord will be like. They have been there 17 years.
Member Since October 2024 - Comments: 197
9:29 AM, 29th November 2025, About 5 months ago
Reply to the comment left by Ryan Stevens at 26/11/2025 – 15:50
In fact she does not understand landlords work and businesses.
How dare she lie by comparing landlords with employees who do not take any risks or have to respond to the tenants to resolve all sorts of property issues, have government compliances for property, forced licences etc. All these responsibilities that the employees don’t have and Reeves has a stupid notion to increase tax, as she believe that will be fair system after the Renters Rights Bill. Why doesn’t she just say that she has messed up the UK’s finances and only way out is to legally steal from the landlords? Because that is what it is.
Member Since October 2019 - Comments: 401
9:31 AM, 29th November 2025, About 5 months ago
Yet another example – those at the top messed the economy, everyone else pays the price!
Member Since March 2024 - Comments: 281
9:36 AM, 29th November 2025, About 5 months ago
Reply to the comment left by Tiger at 29/11/2025 – 09:29
She lied about the black hole too according to the OBR.
Shamless person and Kemi Badenoch rightly called her out on the utterly ridiculous whining about ‘mansplaining’ and ‘misogyny’. To make it crystal clear Rachel, you are not an utterly useless woman, you are an utterly useless Chancellor of the Exchequer. This is not about political differences now just basic integrity and competence.
Member Since March 2023 - Comments: 1506
9:33 AM, 30th November 2025, About 5 months ago
The other killer is the ‘mansion tax’ applied to properties over £2m. Will that affect landlords – especially those with large properties used as HMOs. YES IT WILL, the tax is paid by the landlord and presumably will be applied to uplift the rent. Trouble is that may make the rent for a tenants too expensive and if it exceeds market rent will likely not be allowed by a tribunal.
Member Since April 2024 - Comments: 20
9:57 AM, 30th November 2025, About 5 months ago
Luckily my tenants moving out who’s paying 695 a month. Haven’t increased their rent like an idiot.
New market value is 795 a month
My other tenant pays 550 a month, market value is 650, they will be moving to 595 a month.
These are the consequences.
It won’t impact me, it impacts my tenants
Each meddling will result in a rent increase after 12 months and this will be clearly communicated to the tenant on the reasons.
I hadn’t increased the rent for the one moving out in 3 years whilst they were there, only moving as need a 4 bed mines a 3 due to baby.
But the days of not adjusting the rent yearly are sorely gone now.
12 months and it’s assessed and adjusted.
.thank your government
They didn’t meddle for a little while and my rents remained stable,
Member Since October 2013 - Comments: 1642 - Articles: 3
11:48 AM, 30th November 2025, About 5 months ago
Reply to the comment left by GlanACC at 30/11/2025 – 09:33
The challenge will be setting a new market rent which takes the new taxes into account. The first to try will be appealed and refused, on the basis no one else is at the same level. I think large HMO and whole house profits are in for a hammering, and it will be more for holiday lets which are already subject to multiples of CT.