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17/12/25 3:30 pm
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Letting agents have blamed property taxes as one of the reasons for a big fall in landlords putting rental homes on the market.
The latest RICS residential market survey also shows a monthly slide in tenant demand (a net balance of -22%) - the weakest reading since April 2020. It believes while this partly reflects seasonality, there appears to be a broader cooling at play.
The net balance for landlord instructions remains “deeply negative” at -39%, according to the RICS. It reports: “Some respondents point to the recent increase in property income tax announced in the latest Budget as a factor that could further weigh on new landlord instructions moving forward.”
Anthony Filice, at Kelvin Francis in Cardiff, says senior landlords are offloading their properties due to increasing changes in rental laws and tax increases, while Paul Dolan, at London-based Dolan Pratley Associates, adds: “The November budget shows another tightening in the private landlord sector. Higher taxes will of course mean higher rent, and with the current Renters’ Rights Act moving to a period tenancy and less security for landlords, the sector will continue to reduce the supply of rental properties.”
Churn is very low, with tenants in good rentals keeping their heads down, reports Richard Franklin at Franklin Gallimore in Tenbury Wells. “Now that the timeframe for no-fault eviction has been set, some landlords have been reviewing poorly performing tenants and may well decide to serve Section 21 notices in 2026,” he says.
William Delaney, at Coopers of London, believes the Christmas lull has come early, while the sector waits for implementation of the Renters’ Rights Act. “The winners will be the insurance companies as premiums for rent guarantee and legal expenses will rise significantly,” predicts Delaney. “Delinquent tenants will take full advantage of the changes.”
The RICS says it expects only marginal rent increases during the next three months but that agents predict a +2.5% rise in the year ahead, only slightly below the roughly 3% average expected in the past six months.
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