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14/7/25 8:13 pm
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Accidental landlords will be hardest hit by the Chancellor’s tax grab, while portfolio landlords could reap the benefits, according to one lettings agency boss.
It follows the announcement that landlords face a 2% increase in income tax rates; from April 2027, the property basic rate will be 22%, the property higher rate will be 42% and the property additional rate will be 47%.
David Adams, managing director of Cheshire and North Wales estate and lettings agent Cavendish, believes accidental landlords along with more traditional landlords who don’t use limited companies to run their portfolios will be among those most affected.
“The consequences of the tax raid by the Chancellor will either be that landlords compensate by increasing rents or they decide this is the final straw and withdraw from the market,” predicts Adams.
The tax increase comes after the Renters’ Rights Act became law, which he says combined with the Budget announcement, will inevitably present opportunities for landlords to grow their portfolios as others reduce their portfolios or exit completely from the sector.
“We are already seeing an increase in enquiries from landlords seeking a health check and we expect this trend to only intensify as landlords continue to take stock,” adds Adams.
The government’s other property-related announcement in the Budget - the new ‘mansion tax’ on properties worth over £2 million - will also negatively impact the market, he predicts.
“It’s a bureaucratic nightmare given that it will require the first revaluation of council tax bands in almost 35 years. If the policy does ever go ahead, it will inevitably be beset by appeals by homeowners who find themselves being dragged into the mansion tax.”
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