Research suggests that landlords may be forced to raise rents. This reaction helps account for tax hikes announced in the Autumn Budget.
Upcoming Rental Property Income Tax Hikes
From April 2027, property owners will face a 2% tax increase on their rental income. Specifically, the basic rate of property income tax will rise from 20% to 22%. Meanwhile, the higher tax tier will increase from 40% to 42%. Those individuals paying the additional top rate will see it reach 47%. These sudden changes alter your net cash flow expectations significantly.
Balancing the Renters Rights Act With Rising Costs
In a survey of property investors, 86% expected these new measures to push rents higher. However, the first phase of the Renters’ Rights Act takes effect in May 2026. From that date, landlords can only raise rents once per year. Consequently, you must plan your portfolio financials much further in advance.
Industry experts comment that this policy structure will inevitably result in higher rents from next year onwards. Therefore, if property owners cannot make their portfolios work financially, many could be forced to sell up altogether.
Strategic Financial Advice for Property Investors
Navigating these changing tax brackets requires professional planning. Fortunately, our expert brokers can help structure your portfolio mortgages to preserve yield. You can easily view our current Mortgages options. Alternatively, speak to a specialist on our dedicated Mortgage Advice page to lock in competitive financing rates before the new rules arrive.
Mitigating Risk in an Evolving Market
Smart investors look at secondary variables during a tax shift. For example, moving your properties into a limited company structure can provide tax benefits. Our team evaluates your current debt structure against these options. As a result, you protect your investments from unnecessary policy penalties. We handle the paperwork so you can focus on expanding your business footprint cleanly.
Key Information:
- Mortgage risk: Your home may be repossessed if you do not keep up repayments on your mortgage.
Read the complete study figures at the official Mortgage Strategy News Report.
