Government insists property tax rise will have little impact on rents

John Healey’s suggestion that an additional 4% tax on the private rented sector, introduced over two years, will not affect rents is, in my view, deeply misguided. Landlords facing higher costs may seek to pass them on to tenants, while others may leave the sector altogether. A reduction in supply would put even more upward pressure on rents.
This tax comes amid growing reform fatigue and a regulatory frenzy that hinders rather than supports the rental sector. Meanwhile, build-to-rent housing is largely owned and managed by corporations increasingly focused on higher profits from white-collar workers. At the same time, more than two million council homes have been sold off—and the sales continue—removing much-needed housing from poorer sections of society.
For those of us who have worked in the industry for more than 40 years, calling this a “perfect storm” is an understatement. Unlike the succession of housing ministers who seem to believe that ever more regulation will solve the problem, we have seen the consequences of successive governments’ failures. By the time this bewildering mishmash of private rented sector controls is recognised as one of the greatest cross-party policy failures in English politics, many of those responsible will no longer be in government.
The questions the Government must answer are:
1. What percentage of citizens can afford to buy a home, particularly when replacing the two million council homes sold off by successive governments would now cost more than £450 billion?
2. What percentage can afford rents at a level that also keeps the private rented sector viable?
3. How will the millions of working families who need cheaper rented homes be housed, given the loss of council housing—and how will the two million family homes needed today be provided?
The incompetence of successive governments’ housing policies is almost beyond belief. Yet instead of accepting responsibility, politicians place the blame squarely on the private rented sector. Landlords are now being driven towards more profitable investments, making the perfect storm more certain than ever.
Government spending tells its own story. The amount going towards building new homes is derisory, despite housebuilding being a major manifesto pledge. If ministers continue to increase the burden on landlords without addressing the shortage of homes, they should not be surprised when rents rise and tenants pay the price.

Reply to the comment left by Gecko? at 08:44
I suggest you read their detailed list of policies, which includes repealing the Renters Rights Act. By the way, ‘stop the boats’ is the policy of the Tories (still full of failed Tories) and Labour.

Reply to the comment left by Gecko? at 07/11/2026 – 08:44
Reform has some very attractive policies on taxation and health care.
If they would emphasize these policies and dial back a bit on immigration they would have far more support. Clearly we all know their stance on immigration but it seems there’s less awareness of their other policies.

Reply to the comment left by Richard at 05/11/2026 – 19:12
Problem is house (flat) prices are in free fall, which means even if you can find a buyer you will take a huge capital loss, in my case less than I paid for the property.

Reply to the comment left by David at 07/11/2026 – 09:35
I have one flat left in that situation. Great deal for a cash buyer, but as long as it washes it’s face, I will remain a landlord rather than accept a ridiculous price.

Reply to the comment left by Beaver at 06/11/2026 – 11:42
Perhaps the public will see through Labour’s lies when the 1.5 million houses don’t arrive while they continue to sell social housing off and those who are not eligible for either private rents or mortgages suffer.
Why would Healey want to reverse Section 24, as it adds to badly needed tax revenue and he also doesn’t give a toss about private landlords.

Reply to the comment left by Duncan Paramour at 04/11/2026 – 19:41
My tenant of 14 years offered me a 50% rent rise last year because I’d never raised the rent …. She knew what was coming. I accepted and now she’s saving for a deposit to buy her flat from me.

My plan is to sell between 4 -5 houses each year and increase rent between 5 -6% each year.
Due to complete on my 4th sale of this year.
Renting houses is becoming to risky it time to top up my pension and to invest elsewhere. BTL was my pension is time to get out.

Reply to the comment left by David at 07/11/2026 – 09:35
I think a lot of landlords could be in this same position particularly if they bought flats. I appreciate that you might want to sell but if you can’t sell and get out and your properties are worth either what you paid for them or slightly less then the thing to consider doing would be to transfer them into a limited company now because there would be no capital gain. Within a limited company you would still be able to obtain finance and you would be able to offset your finance costs against your rents. As average rents go up because of Labour’s Renters Rights Act within a limited company you will be able to take advantage of increasing market rent whilst keeping your costs down. The downside is stamp duty but you should be able to finance that if your properties are tenanted and in an area where there is a solid demand for rental property.

Clearly in this environment you will need to be planning to raise rents year-on-year following markets rents upwards.

Reply to the comment left by David at 07/11/2026 – 09:51
Politics is about who can hold the middle-ground. In the short term John Healey isn’t going to want to reverse section 24 because like all his colleagues he is thinking short-term and he is using tenants as tax collectors.

I’m not a member of any political party and I have never been a member but in answer to your question of why you would want to do it, the country needs more safe and energy efficient housing. In fact, there needs to be a boom in safe- energy efficient housing. There needs to be more of this property in the not-for-profit sector (although probably not council housing owned by councils) and there also needs to be a boom in safe, energy efficient property in the private rental sector both to create choice and also to create economic growth.

John Healey just demonstrated that he is as bad as Rachel Reeves. But somewhere out there there must be a politician and a political party that understand the economics of housing and is sufficiently good at communicating to put the case to the electorate. John Healey just showed his colours and it’s not the Labour Party. Somewhere out there there must be a party that genuinely understands sustainability in the sense that if you want to do something sustainable, small businesses, small landlords, owner occupiers and working families all need to be able to afford to do it. If they can’t, then it isn’t sustainable and just like “…we are going to build 1.5 million new homes and were going to fix the housing problem by building council houses”, unfortunately it’s just another lie.