Almost half of landlords plan to increase rents due to planned tax hikes next year.

Income tax rates on property income will increase by two percentage points in April 2027 - and an NRLA poll shows that 46% of landlords will raise rents during the next 12 months as a result. About a third (35%) plan to increase rents by more than previously planned because of the changes, while 33% intend to sell one or more properties.

It comes as Housing Minister Matthew Pennycook recently admitted that tax increases by the last government were the main driver of landlords selling properties.

While 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, says chief executive Ben Beadle (pictured left).

“Renters will be left picking up the bill for the Chancellor’s tax hikes,” he adds. “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.”

The latest RICS residential market survey shows that a net balance of +25% of letting agents anticipate rental prices rising, broadly in line with the average reading seen over the past year.

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John Chappell, of Chappell & Co Surveyors in Skegness, reports that landlords have already put up rents ahead of this month to try and cover some of the cost increases being imposed on landlords by the government.

Reading-based Kevin Townsend, at Townsend & Company, adds: “The Renters’ Rights Act continues to have a negative impact on the market for both landlords and tenants, increasing risk, uncertainty, costs and red tape for landlords and restricting supply and increasing rents for tenants.”

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