Landlords face rising costs as house price growth remains subdued

The Budget has added further financial pressure on landlords as the housing market shows signs of losing momentum.

Data from e.surv reveals that house prices rose by 1.9% year-on-year to £333,000 in October.

However, prices were unchanged compared with September and fell by 0.1% over the quarter.

Further financial pressure for landlords

e.surv claims the Autumn Budget offered targeted support for the housing market rather than delivering a major reset.

Chancellor John Healey announced that tax rates on property and savings income will increase by a further two percentage points from April 2027, on top of the two-percentage-point rise previously announced by Rachel Reeves.

Rob Owens, head of research at e.surv, said the latest increase would add to the financial pressures facing landlord.

He said: “For landlords holding property personally in England, Wales and Northern Ireland, property-income tax rates will rise by a further two percentage points from April 2027, in addition to the two-point increase already announced by Rachel Reeves.

“For landlords already managing higher financing costs, the change will further reduce post-tax rental income. Taken together, the measures are unlikely to transform the near-term housing market. They provide more support for first-time buyers and developers, while adding another cost for some landlords.”

Earnings have grown faster than house prices

The data also reveals that across every region of Great Britain, earnings have grown faster than house prices since 2023.

London shows the widest gap. Median full-time earnings have grown at an annualised rate of just over 8% since 2023, while house prices have fallen by around 1% a year, leaving a gap of more than nine percentage points. The West Midlands, South West and South East also show sizeable gaps between earnings and house-price growth.

e.surv also says annual price growth has eased for several months, following a period of strengthening through 2025 and early 2026. The market is still recording annual gains, but they are becoming thinner.

Scotland recorded the strongest annual growth at 3.5%, followed by the North West at 3.3% and Yorkshire and the Humber at 3.2%. Growth also remained above 2% across Wales, the West Midlands, East Midlands and North East.

Further south, momentum was weaker. Annual growth slowed to 1.8% in the South West, 1.1% in the East and 0.7% in the South East. London remained the only region in decline, with prices down 1.3% annually and 1.0% over the quarter.