WIREDGOV

Renters face bearing the brunt of the Chancellor’s planned tax hikes, with almost half of landlords planning to increase rents as a result of the changes due next year. 

From April 2027, income tax rates on property income will increase by two percentage points as announced in last autumn’s Budget. 

New research suggests the impact on rents will be severe. A poll of National Residential Landlords Association (NRLA) members by the research consultancy Pegasus Insight found that 46 per cent of landlords plan to increase rents over the next 12 months as a result of the tax rise.

Around a third (35 per cent) of landlords plan to increase rents by more than previously planned because of the changes, while 33 per cent said they plan to sell one or more properties as a result.

The Office for Budget Responsibility (OBR) has previously warned that the policy would lead to higher rents.

It comes as the Housing Minister, Matthew Pennycook, has recently admitted that tax increases by the last Government has been the main driver of landlords selling properties. Such taxes have only grown further under the current Government. 

Whilst Government policy risks pushing tenants’ rents higher, those reliant on housing benefit to access the sector continue to face the impact of a freeze on the support they can access, making it harder for them to sustain tenancies.

The Institute for Fiscal Studies has warned that the tight fiscal position in which the Government finds itself is “no excuse for a system that creates uncertainty for renters and unfairness between local areas.”

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

“If the Government is serious about easing cost of living pressures, it needs to look in the mirror. 

“To be increasing the cost of providing rental housing, whilst keeping housing benefit support frozen, simply makes no sense.

“Renters will be left picking up the bill for the Chancellor’s tax hikes. The Government needs to scrap plans that risk pushing rents higher and making it harder for people to find a home.

“And for those proposing rent controls as the answer, they do nothing to address the root cause of higher rents – rising costs and a chronic shortage of homes to meet demand.”

Notes:

• Pegasus Insight undertook 631 online interviews with current members of the National Residential Landlords Association between 9th March and 3rd April 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.
• At a recent event at the Institute for Government, the Housing Minister, Matthew Pennycook MP, is reported to have said that -to-let landlords were mostly selling up because of tax changes introduced under the last Conservative Government. See details here.
• The Institute for Fiscal Studies analysis on Local Housing Allowance rates can be accessed here.
• Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.
• For further information contact Ed Jacobs by emailing ed.jacobs@publicaffairsco.com or calling 07900 052659. 
• The NRLA’s press office can be contacted by emailing