The latest research fromย LegalforLandlords has found that 59% of UK private landlords are pessimistic about the upcoming Autumn Budget, with concerns over taxation and the future profitability of the sector weighing heavily on confidence.
The findings suggest that further financial pressure on landlords could prompt rent increases, property sales and some landlords to leave the private rented sector altogether.
The findings are based on a survey of 544 UK private landlords* conducted by LegalforLandlords ahead of the upcoming Autumn Budget.
Respondents were asked about their expectations for the Chancellor’s fiscal announcements, their main concerns, and the measures they believe would support the private rented sector.
Tax, tax and more tax
Taxation is landlords’ biggest concern ahead of the Budget. Some 22% say they are most worried about increases to capital gains tax, while 20% identify income tax on rental income as their primary concern. A further 18% are concerned about the cost of any obligatory energy efficiency upgrades that could be introduced.
The findings highlight the financial pressures facing landlords as they consider the future of their property investments. With fewer than three in ten confident that being a private landlord will remain financially worthwhile over the next five years, the results point to a lack of confidence in the sector’s long-term prospects.
If the Chancellor increases the tax burden on landlords, 40% say they will increase rents where possible. A further 18% would consider selling properties, while 16% say they would leave the private rented sector altogether.
The consequences of more financial hits
These responses raise questions about the potential consequences of further financial measures on the availability and affordability of rental housing. While individual landlords will decide based on their own circumstances, the findings suggest additional costs could affect both rents and how many properties landlords are willing to keep.
When asked what the Chancellor could do to improve confidence, 30% of landlords said reducing income tax on rental income would help most. Another 27% favour reducing capital gains tax, while 17% would like to see mortgage interest tax relief introduced or increased.
Landlords also identified measures they believe could help improve the supply of homes in the private rented sector. A quarter (25%) say tax relief for landlords would help, while 15% point to the need to reduce compliance and regulatory costs. Another 15% believe the Government should prioritise building more social housing, rather than placing further financial pressure on private landlords. Just 7% identify measures to improve tenant affordability as the answer to increasing the supply of private rented homes.
The results suggest landlords want the Government to consider the wider implications of its Budget decisions, particularly how taxation and regulatory costs affect the financial viability of providing rental accommodation.
Sim Sekhon, Group CEO of LegalforLandlords, said: โThe message from landlords ahead of the Autumn Budget is clear: confidence is low, and further financial pressure could have consequences for both landlords and tenants.
โLandlords are running businesses and making long-term investment decisions. If the cost of providing rental housing continues to rise, some will look to increase rents where they can, while others may decide that remaining in the sector is no longer financially viable.
โThe Government needs to consider the impact of any additional measures on the supply of rental homes. Improving the financial viability of being a landlord, alongside addressing the costs of compliance and regulation, could help support confidence and encourage landlords to remain in the market.
โThe Autumn Budget is an opportunity to provide greater certainty for the sector. Policies that support a sustainable private rented sector will be important for landlords, tenants and the wider housing market.โ
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