Landlords responding to a post-Budget poll largely expect to raise rents when next permitted to do so, with 73% saying rental income tax changes will push rents higher, according to new research from Pegasus Insight.
The snap poll covered 168 members of the National Residential Landlords Association (NRLA). The largest group, 38% of all respondents, chose a rent rise of 5% to 10% or market rents, whichever is higher. A further 11% selected an increase of more than 10% or market rents, while 24% opted for an increase of less than 5% or market levels.
The poll asked landlords about rental income tax rates of 24%, 44% and 49% from April 2027 for those holding property personally, reflecting the combined effect of increases announced in this Budget and last year.
Sales plans featured as well. Some 52% of respondents plan to sell property over the next 12 months in response to the rental income tax changes, including 38% planning to sell some properties and 14% planning to sell their entire portfolio. Only 2% plan to buy more rental property, while 26% expect no change and 20% said it was too early to say.
Spending also looks set to fall. Almost three in ten respondents (29%) anticipate cutting spending on maintenance or improvements, including 13% who expect a significant reduction. However, 55% expect no change.
“The industry has repeatedly warned that increasing taxes on landlords risks increasing costs for tenants,” said Mark Long, director of Pegasus Insight (pictured).
“Announcing another two percentage point rise before the previous increase has even taken effect suggests those warnings have gone unheard.
“The comments behind these figures are particularly telling. Landlords describe the increases as a stealth tax on tenants and question how they can keep investing in their properties, including improving energy efficiency, while absorbing another hit to their income. For some, the cumulative pressure is prompting them to question whether they want to continue letting property at all.
“The Government needs to consider what it is asking landlords to deliver and whether its tax policy supports that. Tenants need good quality homes at rents they can afford, and providing those homes requires continued investment. Squeezing the income available to fund that investment risks undermining those ambitions.
“These are immediate reactions, and intentions to raise rents or sell will not all become reality,” he noted. “But the strength of the response should give the Government serious pause for thought.”
