Almost three-quarters (73%) of landlords intend to increase rents at the next available opportunity following the Government’s announcement of an additional two-percentage-point rise in tax on rental income in last month’s Budget.
The figures come from a snap survey of 168 National Residential Landlords Association (NRLA) members conducted by Pegasus Insight.
Of those surveyed, 38% said they planned to raise rents by between 5% and 10%, or bring them up to market levels if higher. A further 11% intended to increase rents by more than 10% or to market rates, while 24% were considering a rise of less than 5% or an adjustment to market levels.
The planned tax increase, due to take effect in April 2027, is also influencing landlords’ decisions about whether to remain in the rental market.
More than half (52%) said they were considering selling property within the next 12 months. This includes 38% who plan to sell part of their portfolio and 14% who intend to sell all their rental properties.
Only 2% of respondents said they planned to expand their portfolios. Meanwhile, 26% expected to make no changes, while 20% had yet to decide.
The survey also found that 55% of landlords did not expect to change their spending. However, 29% anticipated reducing expenditure on property maintenance and improvements, including 13% who expected to make significant cuts.
Landlords say warnings have been ignored
Mark Long, director of Pegasus Insight, said the latest findings reflected concerns that further tax increases could push up costs for tenants.
He argued that the Government had introduced another two-percentage-point increase before the previous tax rise had even come into effect, despite repeated warnings from the industry about the potential consequences.
Comments from landlords suggested that many viewed the changes as an additional tax burden that could ultimately be passed on to tenants. Others questioned whether they could continue investing in their properties, particularly in energy efficiency improvements, while facing further pressure on their rental income.
Long also warned that the combined impact of higher taxes was causing some landlords to reconsider whether they wanted to remain in the private rented sector.
He said the Government needed to consider whether its tax policies supported the investment required to provide good-quality rental homes at affordable prices. Reducing the income available to landlords could make it harder for them to maintain and improve their properties.
Although the survey captures landlords’ current intentions rather than confirmed decisions, Long said the strength of the response should prompt the Government to reconsider the possible effects of its tax plans.
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