By Islam El-Sakka
Renters in the UK face an average £700 annual increase after the Autumn Budget raised property taxes on landlords, according to warnings from the National Residential Landlords Association (NRLA) and the Office for Budget Responsibility (OBR).
Tax surcharge increased
Chancellor John Healey confirmed a further two percentage point tax increase on rental income from April, adding to an identical increase announced by his predecessor Rachel Reeves last year. The surcharge will be four points higher from April 2027.
Impact on rents and supply
The OBR warned the increased tax burden, alongside other housing policies, will reduce rental supply and push up prices. NRLA research found 46% of landlords planned to raise rents, with 35% planning larger increases than before, and 33% intending to sell properties.
Differing expert views
The Resolution Foundation's Hannah Aldridge said rent rises are likely to be small as rents track earnings, and most of the tax rise will affect landlords' margins. Savills' Lucian Cook said the policy adds to supply squeeze, reducing tenant choice and putting upward pressure on rents.
Housing benefit concerns
Housing groups criticized the Budget for not addressing frozen Local Housing Allowance (LHA) rates. The Resolution Foundation found the shortfall between LHA and the bottom 30% of local rents reached a record 23.3%, equal to £170 a month for a typical family. Generation Rent warned this undermines efforts to end rough sleeping.
