Budget Lowdown: What Landlords Need to Know.

The Chancellor’s Budget landed with a bit of a thud for landlords across the UK. While there were no dramatic surprises, several changes will affect the rental market over the next few years. We’ve pulled together a simple breakdown of what actually changed, what it means in practice, and how we think the rental market could react.

The Key Changes at a Glance

• Income tax on rental income is rising from April 2027. All bands go up by 2 percentage points (22% / 42% / 47%), meaning smaller take-home profit for many landlords.

• A new ‘mansion tax’ for very high-value properties arrives in 2028. Homes worth over £2 million will face an annual surcharge ranging roughly between £2,500 and £7,500.

• No National Insurance on rental income (good news!) The government held off on applying NI to landlords.

• A possible ‘visitor levy’ for short-term accommodation. Holiday-let owners may see an additional charge depending on how this consultation progresses.

What This Means for Our Landlords

1. More pressure on margins

   The main tax rise will reduce net rental income for most landlords. For those already operating tight yields, this could prove particularly challenging.

2. Some landlords may look to increase rents

   Many will try to balance rising costs by adjusting the rent charged. This ultimately impacts tenants and means landlords need to charge more in order to cover their costs.

3. Some landlords might choose to exit

   With profitability squeezed, some may decide to sell up or explore company structures instead.

4. High-value property owners will need to plan ahead.

   For those with properties above £2 million, the new surcharge from 2028 could become a significant annual cost.

5. Holiday-let landlords should stay tuned

   If a visitor levy does become reality, it may influence pricing strategies or the overall viability of certain stays.

Our Predictions for the Property & Rental Market

1. Supply & demand will be further challenged

   If more landlords exit, the number of available homes to rent may fall, pushing rental prices up in many areas.

2. Rents will likely continue rising

   With higher taxes and demand remaining strong, rent increases feel inevitable across much of the UK.

3. A shift towards more corporate landlords

   Larger, heavily-capitalised landlords (and limited companies) may increasingly dominate, while smaller landlords shrink in number. We have already seen the rise of large organisations (such as the banking sector) buying up large numbers of residential homes.

4. Holiday-let market may recalibrate

   If a levy is introduced, expect price adjustments for short stays and potentially fewer casual hosts.

In a nutshell:

This Budget nudges the market toward higher operating costs and a gradually tightening rental landscape. For landlords, it’s more important than ever to stay informed, plan ahead, and make sure each property is working as efficiently as possible.

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