Your rent about to jump? 65% of landlords say Reeves’ tax hike is why
The UK government’s latest tax changes on landlords are set to drive up rents across the country, with new polling revealing that two-thirds of landlords planning increases point directly to the hikes as a major factor.
New research from the National Residential Landlords Association (NRLA) shows that 65% of landlords who intend to raise rents over the next 12 months cite the upcoming two-percentage-point increase in income tax on rental income as a key reason. This ranks second only to rising property running costs (68%).
The tax rise, announced by Chancellor Rachel Reeves in the November 2025 Budget, will see property income tax rates climb to 22% (basic), 42% (higher), and 47% (additional) from April 2027. The independent Office for Budget Responsibility (OBR) has explicitly warned that this policy will contribute to higher rents, as reduced landlord profitability could shrink the supply of rental homes while demand remains strong
Ben Beadle, Chief Executive of the NRLA, said the findings are a ‘wake-up call’ for the governemnt.
“Hiking taxes on rented housing will lead to higher rents. It’s not exactly clear how this approach will address the cost-of-living crisis ministers now say is the Government’s number one priority,” he said.
Growing pressure on private rental sector
The NRLA’s poll, conducted by Pegasus Insight with over 800 landlord interviews in recent months, also highlights broader pressures on the private rental sector: 61% of landlords report strong tenant demand.
A net exodus of properties continues, with 24% of landlords selling in the past year versus just 5% buying (a 19-percentage-point gap, more than double early 2024 levels). 27% of sales involved tenanted properties.
Compounding these issues is the impending Renters’ Rights Act, which will scrap Section 21 no-fault evictions. A staggering 91% of landlords express concern over court backlogs for legitimate possession cases (under Section 8), with government data showing average waits of over seven months for processing and enforcement—the longest since early 2022.
“Ministers have pledged to ensure the justice system is ready… However, as of yet, they have failed to explain what ready means. Warm words mean nothing without a clear plan to ensure legitimate possession cases are processed and, if needed, enforced far quicker than at present,” Beadle said.
Rent price hikes coming
Experts and landlord groups have long predicted these outcomes from repeated tax squeezes on the sector, including earlier restrictions like Section 24 mortgage interest relief changes.
With rental supply already tightening and costs mounting, the consensus is clear: tenants face the real-world fallout through sustained upward pressure on rents, potentially £20-£25 extra per month nationally, and over £40 in high-demand areas like London.
As the 2027 changes loom, the private rented sector risks further contraction unless policymakers address these warnings head-on.
