Just 28% of private landlords are confident that letting property will remain financially worthwhile over the next five years, while 40% say they would increase rents if landlord tax rises follow in the Autumn Budget.
LegalforLandlords found that 59% of UK private landlords are pessimistic about the upcoming Budget, with taxation and the future profitability of the sector weighing heavily on confidence. Its findings suggest further financial pressure could prompt rent increases, property sales and some landlords leaving the private rented sector altogether.
The research surveyed 544 UK private landlords on 9 October through consumer research platform FindOutNow, with ProperPR conducting the survey on behalf of LegalforLandlords. Respondents answered questions on their expectations for the Chancellor’s fiscal announcements, their principal concerns and the measures they believe would support the private rented sector.
Landlord tax rises dominate Budget worries
Taxation is the biggest concern ahead of the Budget. Some 22% say they are most worried about capital gains tax increases, while 20% name income tax on rental income as their primary concern. A further 18% worry about the cost of any mandatory energy efficiency upgrades.
If the Chancellor raises 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.
Consequences of further financial pressure
Individual landlords will decide based on their own circumstances, but the findings suggest landlord tax rises and other added costs could influence both rents and the number of properties landlords are willing to retain.
Asked what the Chancellor could do to improve confidence, 30% picked a cut to income tax on rental income as the most helpful measure. A further 27% favour lower capital gains tax, while 17% want mortgage interest tax relief introduced or increased.
Landlords also named measures they believe could improve rental supply. A quarter say tax relief would help, while 15% point to reducing compliance and regulatory costs. Another 15% believe the government should prioritise building more social housing rather than placing further financial pressure on private landlords, and just 7% see measures to improve tenant affordability as the answer.
“The 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,” said Sim Sekhon, group chief executive of LegalforLandlords.
“Landlords 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.
“The 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.
“The 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.”
