Buy-to-let landlords across the UK are sounding the alarm over a significant new financial burden set to take effect in 2027. The warning follows Chancellor Rachel Reeves' autumn budget announcement, which will see tax on property income rise by two percentage points from April 2027.
The Personal Cost for Landlords
For veteran landlords like Neil France, who has been in the business for 15 years, the change will have a direct and painful impact. The 68-year-old estimates the tax increase will cost him an extra £2,500 per year, a sum he says he cannot absorb. "You’ll never lose votes for hammering a landlord. That’s the reality," France told the Guardian. "It used to be estate agents and bankers; now it’s landlords."
He explained that this latest measure comes on top of existing pressures from rising interest rates and other sector reforms. As a result, he has been forced to inform his tenants that rents will have to increase again from next year. "I’ve tried to feed that through gently to tenants," France said, "But I had to write to all of them and say I’ve had to do some recalculations."
A Sector Under Cumulative Pressure
Property experts agree that while the two-point rise alone may not be catastrophic, it represents another straw on the camel's back for smaller, private landlords. Lucian Cook, head of residential research at Savills, noted the tax change is "likely to accentuate the next wave of smaller landlords" deciding to exit the market. He stated it adds to a series of changes that make many ask, "'You know what? It’s no longer worth the hassle.'"
This sentiment is echoed by landlords like Philip Waters, 62, who believes it is becoming "almost impossible" for smaller operators. "The government is clearly wishing for corporates and pension companies to run the rental sector," he suggested.
Broader Consequences for Renters and Buyers
The industry's leading body has issued a stark warning about the policy's potential impact on the very people it may aim to help. Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), argued the move "beggars belief." "Piling on further tax rises that will drive up rents, while keeping housing benefit rates frozen, is a one-way street to hitting low-income tenants the hardest," he said.
However, the picture is not uniformly negative for all. Aneisha Beveridge, head of research at Hamptons, pointed out a potential silver lining for first-time buyers. She noted that the proportion of first-time buyers has risen from roughly 12-15% a decade ago to about 33% today. "So I think having a little bit less competition from investors has helped some first-time buyers," she concluded.
Meanwhile, tenant advocacy groups urge caution regarding predictions of a mass landlord exodus. Ben Twomey, chief executive of Generation Rent, said such threats "should be taken with a large pinch of salt." The debate highlights the complex balancing act in housing policy, where measures affecting one part of the market inevitably create ripple effects throughout.
