Nearly three-quarters (73%) of landlords say they intend to increase rents when next permitted to do so, following the additional 2-percentage-point increase to rental income tax announced in last month’s budget.
The findings, from Pegasus Insight, follows a snap poll of 168 members of the National Residential Landlords Association (NRLA).
Nearly four in ten (38%) of all respondents said they would charge an increase of 5% to 10% or market rents, whichever is the higher. 11% cited an increase of more than 10% or market rents, while 24% selected an increase of less than 5% or market levels.
The tax changes, which come into effect from April 2027, are also prompting more than half (52%) to sell over the next 12 months. More than a third (38%) plan to sell some properties and 14% aare planning to sell their entire portfolio. Only 2% are looking to expand portfolios, 26% expected no changes and 20% said it was too early to say.
Although half (55%) said there would be no change to their spending, nearly three in ten (29%) anticipated cutting spending on maintenance or improvements, including 13% who expected to reduce it significantly.
Mark Long, director of Pegasus Insight, said: “The industry has repeatedly warned that increasing taxes on landlords risks increasing costs for tenants. Announcing another two- percentage-point rise before the previous increase has even taken effect suggests those warnings have gone unheard.
“The comments behind these figures are particularly telling. Landlords describe the increases as a stealth tax on tenants and question how they can keep investing in their properties, including improving energy efficiency, while absorbing another hit to their income. For some, the cumulative pressure is prompting them to question whether they want to continue letting property at all.
“The Government needs to consider what it is asking landlords to deliver and whether its tax policy supports that. Tenants need good quality homes at rents they can afford, and providing those homes requires continued investment. Squeezing the income available to fund that investment risks undermining those ambitions.
“These are immediate reactions, and intentions to raise rents or sell will not all become reality. But the strength of the response should give the Government serious pause for thought.”
This article is taken from Landlord Today