With the Autumn Budget imminent, speculation about increased taxes on landlords is causing unease across the UK property sector. Proposals such as higher capital gains tax and a new annual property tax risk adding to the already substantial fiscal burden landlords face. Our data from Prop AI Deals shows that rental yields have been under pressure for several quarters, largely due to rising interest rates and inflationary costs.
Increasing taxes on landlords now could discourage investment in the rental market, tightening supply at a time when demand remains strong. Rental growth has slowed but has not reversed, and any reduction in landlord appetite could push rents higher, exacerbating affordability issues for tenants. The government’s aim to boost housing supply may be undermined if the financial incentives for private landlords diminish further.
Historical analysis suggests that tax hikes targeting landlords often lead to reduced investment rather than increased revenue over the medium term. The sector needs stability to encourage refurbishment and new builds, which will help meet the growing demand for rental properties. Policymakers should consider the knock-on effects on rental availability and affordability before implementing additional tax measures.
Source: Property118
