WIREDGOV

Two thirds of landlords planning to increase rents cite forthcoming tax rises on the sector as a key reason according to new polling.

In her recent Budget, the Chancellor announced plans to increase income tax on rental income by two percentage points from 2027. In response, the Office for Budget Responsibility (OBR) warned that it would lead to higher rents.

New data now supports the OBR’s concerns. In a poll of NRLA members by the research consultancy Pegasus Insight, among landlords who are set to increase their rents over the next year, 65 per cent cite the tax increase as a key factor in their decision. This was second only to the 68 per cent who observed the need to cover the increased cost of running a property more generally.

Looking ahead, with the Government due to end ‘no explanation’ repossessions from 1st May, landlords cite court backlogs in the court system for repossessing properties as their leading concern. According to the data, 91 per cent were either very concerned or slightly concerned about court wait times. 

The findings come as Government data shows it takes an average of over seven months for the courts to process and enforce possession cases brought to it under the system replacing Section 21. This is the longest it has been since the start of 2022. 

When it comes to market conditions more broadly, 61 per cent of landlords surveyed said tenant demand was now strong. In spite of this, almost a quarter (24 per cent) said they had sold property over the previous 12 months, compared with just 5 per cent who said they had purchased properties during the same period. 

At 19 percentage points, the gap between those saying they have sold property, and those saying they have purchased any is over twice the level it was at the start of 2024 (eight points). 

Of those who have sold property in the last year, over a quarter (27 per cent) did so with existing tenants in situ.

Responding to the findings, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“This research should be a wake-up call to the Government. Hiking taxes on rented housing will lead to higher rents. It’s not exactly clear how this approach will address the cost-of-living crisis ministers now say is the Government’s number one priority.

“More broadly, with no fault repossession due to end in just a matter of months, responsible landlords are seriously concerned about court backlogs. Ministers have pledged to ensure the justice system is ready to process cases where landlords have good reason. However, as of yet, they have failed to explain what ready means. 

“Warm words mean nothing without a clear plan to ensure legitimate possession cases are processed and, if needed, enforced far quicker than at present.” 

Notes:

• Pegasus Insight undertook 837 online interviews with current members of the National Residential Landlords Association between 7th December 2025 and 5th January 2026. 
• In its Economic and Fiscal Outlook published alongside the Budget, the Office for Budget Responsibility said: “From April 2027, a 2-percentage point increase to the basic, higher and additional rates of property income tax, increasing them to 22, 42 and 47 per cent respectively. This is estimated to yield £0.5 billion a year on average from 2028-29. The costing incorporates a small negative impact as a result of the pass-through of the tax increasing rents, which is more than offset by a reduction in house prices reducing other receipts.” The Outlook can be accessed in full here.
• Ministry of Justice statistics show that, in the period July-September 2025, the average (mean) time from a claim being issued by the county court to a private landlord repossessing a property under the Section 8 process to them actually getting the property back was around 34.3 weeks. This is the highest it has been since the first quarter of 2022 when it was 37.8 weeks. The data can be found in table 6 here.  At the top of the sheet where it says “Possession Type” on the drop-down menu next to it just click “Private_Landlord”.
• Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.
• The NRLA’s press office can be contacted by emailing press@nrla.org.uk or by calling 0300 131 6363.