Property experts slam Budget tax raid on landlords
2 weeks ago | 25 comments
Government insists property tax rise will have little impact on rents
10:30 AM, 4th November 2026, 6 days ago
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The government claims a two-percentage-point tax rise on property income would have only a small impact on rents.
Chancellor John Healey announced in the Budget that tax rates on property and savings income will increase by a further two percentage points from April 2027, adding to the rise announced by Rachel Reeves last year.
During a debate, Housing Minister Matthew Pennycook claimed the additional increase would have only a small impact on rent prices.
Push rents up higher
Mr Pennycook told the debate: “At the Budget last year, the Office for Budget Responsibility (OBR) assessed that there would be only a small impact on rental prices of 0.2% as a result of the 2 percentage point increase to property rates from April 2027, and we expect the further increase of 2 percentage points announced in the Budget last week to have a comparably small effect.”
However, during the debate, Conservative MP Steve Barclay pointed to the OBR’s assessment of the additional two-percentage-point tax rise, warning that the measure could push rents higher for tenants and reduce the supply of rental properties.
Mr Barclay asked Mr Pennycook: “Does the Minister think the OBR is wrong? If not, does he accept that rents will go up as a result of those measures?”
Small impact on rents
Mr Pennycook continued to claim the additional two-percentage-point increase would have only a small impact on rents, while criticising the Conservatives over their opposition to new housing developments.
He said: “At the Budget last year, the OBR assessed that there would be a small impact of 0.2% on rental prices as a result of that increase, and we expect a similarly small impact from this increase.
“The obvious answer to affordability challenges in the private rented sector, as well as everywhere else, is to build more housing supply.
“That is why it is so disappointing that Opposition Members, despite what those on their front bench say, consistently complain about new housing developments coming forward in their constituencies.”
Tags:
Budget 2026, Landlord Tax, Matthew Pennycook, Office for Budget Responsibility, property and savings income
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Member Since May 2014 - Comments: 172
11:32 AM, 4th November 2026, About 6 days ago
Few businesses absorb costs at the expense of diminishing or loss of profit. These `costs` are ideologically driven taxes to pursue the communist’s agenda to control..control..control. Pennycook is deliberately obscuring the facts.
Member Since March 2020 - Comments: 1
11:34 AM, 4th November 2026, About 6 days ago
Reply to the comment left by Jo Westlake at 04/11/2026 – 10:45
Had a conversation with one of my tenants yesterday whilst cleaning the gutters, she too was scared I was going to sell up. Said she’d have to go to the council if I did because she wouldn’t be able to afford a private tenancy (I keep rents below market value). I explained that the rent would be going up in April due to the tax rise and that although I currently am not planning on selling, I can’t predict what else will be coming at us landlords from our government. Too much more from them and I may have to exit.
Member Since May 2015 - Comments: 2349 - Articles: 2
11:50 AM, 4th November 2026, About 6 days ago
Reply to the comment left by Az at 04/11/2026 – 11:34
Section 21 has been abolished so tenants can now feel secure in their property, well done Shelter*. But wait, instead of section 21 we now have landlords potentially selling and making tenants homeless in the process, well done Shelter*.
The law of unintended consequences applies to all ill considered legislation.
* Credit where it is due, many other anti landlord organisations exist and contributed to the mess we are now in.
Member Since April 2018 - Comments: 710
12:04 PM, 4th November 2026, About 6 days ago
Reply to the comment left by moneymanager at 04/11/2026 – 11:15
As you say a 4% increase is a 20% increase in the tax which is even more frightening and unfair. Remember though landlords are not working people !!!!!!
Member Since April 2018 - Comments: 710
12:05 PM, 4th November 2026, About 6 days ago
As you say a 4% increase is a 20% increase in the tax which is even more frightening and unfair. Remember though landlords are not working people !!!!!!
Member Since May 2015 - Comments: 2349 - Articles: 2
12:08 PM, 4th November 2026, About 6 days ago
Reply to the comment left by David at 04/11/2026 – 12:04
If landlords are not working people how can they be fined for not doing some administrative process correctly?
Member Since January 2015 - Comments: 1657 - Articles: 1
12:12 PM, 4th November 2026, About 6 days ago
Well they’ll and tenants will be in for a shock then won’t they
Member Since May 2018 - Comments: 2674
12:33 PM, 4th November 2026, About 6 days ago
Reply to the comment left by David at 04/11/2026 – 12:05
If you are working either as an employed or self-employed person and have a family so have high expenses and limited opportunities to reduce your gross earnings (e.g. by paying into pensions), and you have a property with a BTL mortgage and your rental earnings push you into the 40% tax band because of your gross earnings from employment then you need a much bigger increase in rent to cover the additional tax levied on you by the chancellor. In fact, as a BTL landlord if the loan to value ratio of the mortgage is higher, i.e. if you are POORER in net worth terms, then you have to push up rents MORE to avoid a cash loss.
John Healey just showed the world that he isn’t any better than Rachel Reeves.
Member Since January 2026 - Comments: 14
12:47 PM, 4th November 2026, About 6 days ago
Reply to the comment left by John MacAlevey at 04/11/2026 – 11:32
I couldn’t agree with you more
Member Since February 2020 - Comments: 408
12:59 PM, 4th November 2026, About 6 days ago
No choice but to pass them on.
Tenants will know it is due to government policy.