Tell me again why landlords should persist in a PRS rigged against them

I think the kids call it doom scrolling, when you can’t stop reading negative news stories and comments on social media.

In my case, the landlords on X/Twitter have had a field day after the Budget and its potential impact.

I made a crack last week about getting those landlords who don’t engage with what’s happening to wake up.

They obviously haven’t done so, but there’s a timebomb heading our way and when it explodes, it will be too late.

Why do we remain?

We are all worried about the mounting financial and regulatory pressures and Rachel’s Budget has amplified these concerns.

With most posts reflecting on profitability issues and the disaster that is the Renters’ Rights Act, it’s time to ask a serious question.

Why do landlords continue working in this environment? We offer homes and we work and pay taxes.

Obviously, we now pay more under Labour and some of us will be worried that our pension plans have taken a knock.

It never used to be like this. The appeal of buy to let investment was once compelling, especially in the 1990s and early 2000s.

That’s when we had favourable tax treatments, strong rental yields and high tenant demand which enabled us to build portfolios to save for our futures.

And the futures of our children too.

2% property tax rise

Our properties represented tangible assets, offering control and potential for long-term growth.

However, the landscape has been profoundly transformed.

The 2% increase in property income tax from 2027, frozen personal allowances until 2030-31, will hurt profitability.

The government’s framing of these measures as promoting ‘fairness’ belies their impact: they disproportionately burden the 2.4 million landlords in the PRS, which houses nearly five million households.

This is not a balanced policy; it is a targeted disincentive for private investment in housing.

Industry surveys reveal that 90% of landlords anticipate passing on costs through higher rents, which should be obvious, even to Labour politicians.

And this is happening with the RRA’s restrictions on in-tenancy rent increases, the need for six months’ notice and mandatory pet permission.

These reforms bring administrative overheads and introduce operational uncertainties, leading many landlords to reassess their business models.

Landlord incentives disappear

On top of that, the fines for non-compliance could see an entire investment’s profit disappear.

No-one can explain what happens when the courts are stuffed and tenants lodge claims against rent rises.

I’ve said before this process has brought in a rent cap via the back door because the Tribunal will look at local market rates.

Good luck with that.

Then we have the joy of meeting the Making Tax Digital requirements from next April.

This is a process of death by a thousand cuts because it’s not always the headline news that hurts: it’s usually the small announcements.

But it can’t all be bad, can it?

I read on landlord forums that many are in the process of selling or have sold up.

But the PRS keeps on expanding.

There must be a new landlord reading this who can explain why they think the PRS is such a good investment prospect.

I’d love to know, and I’m sure those who have had properties for years would appreciate that input.

PRS is a political football

For me, the risks of losing everything has grown too much.

The unannounced council visits to find issues and handing out huge fines is hard to stomach when many council properties are a disgrace.

The PRS has undoubtedly become a political football, but landlords have managed to be dropped from both teams!

We are at the back of the stands, being drowned out by the noise made by tenant activist groups.

I love reading on landlord forums about how things were in the 1970s. It sounds almost unbelievable, but we appear to be going back there.

Now it looks like landlords need to start looking at portfolio restructuring and incorporation for efficiency.

Should we also be looking into diversification into less regulated segments like commercial property?

But here again I’m looking at the inescapable consequence of inaction.

Wait for tax bills

By January 2027, self-assessment tax demands will arrive, bringing into sharp, hideous focus the Budget’s full impact.

The 2% rate adjustment, compounded by static income tax thresholds, will hurt.

Capital gains on disposals, taxed at up to 28%, will compound losses for those landlords who belatedly decide to sell.

While I want to remain committed to the PRS, I’m left with the inescapable feeling that the window for a strategic retreat is slowly closing.

So, why persist? The PRS apparently no longer rewards resilience but punishes it.

Selling now still offers a dignified path to financial security, unencumbered by an evolving regulatory nightmare world.

We were told that good landlords have nothing to fear from the Renters’ Rights Act. I’d like to believe that’s true, but I’m not so sure.

Perhaps someone, anyone, can help convince me otherwise?

Until next time,

The Landlord Crusader

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