The recent Autumn Budget has introduced a two percentage point rise in tax rates on dividends, property income, and savings, a move that mortgage lender Together warns will increase costs for landlords and consequently lead to higher rents for tenants. This development is significant for UK landlords as it impacts net rental yields and may influence portfolio management decisions in the coming years.

Impact of Tax Increases on Landlords and Renters

Mortgage lender Together conducted a poll of 2,000 people which revealed that 86% believe the increased costs faced by landlords due to the Autumn Budget’s tax hikes will result in rent rises for tenants. This concern is particularly strong among Baby Boomers aged 61 to 79, with 94% expressing this view.

Ryan Etchells, chief commercial officer at Together, explained that many landlords have previously absorbed increased costs rather than passing them on to tenants. However, the recent two percentage point increase in property income tax rates, introduced by Chancellor Rachel Reeves, is expected to strain landlords’ finances further. Etchells noted: “The two percentage point hike will not only leave landlords out of pocket, but also renters. Our research shows that the public understands that the extra costs will fall to those renting their homes.”

Regulatory and Financial Pressures on Landlords

Landlords are currently navigating a challenging regulatory and tax environment, including the forthcoming Renters’ Rights Act. These pressures add to the financial burdens that landlords must manage, making it increasingly difficult to maintain profitability without adjusting rents. Etchells highlighted that if landlords cannot sustain their portfolios under these conditions, some may be compelled to sell their properties.

Strategic Responses for Landlords

Property118 offers a practical perspective on how landlords might respond to these changes. Selling properties should not be viewed as a failure but rather as a strategic decision to protect returns and maintain financial stability. Portfolio landlords may choose to reshape or partially exit their holdings to preserve long-term flexibility.

Landlords are advised to:

• Model the tax impact precisely: Calculate how the two percentage point increase will affect net yields over the next three years. This analysis will inform whether holding, refinancing, or selling is the most advantageous course of action.
• Prepare documentation and audit records: Organise valuations, tenancy schedules, mortgage information, and maintenance records. Having a well-maintained portfolio file facilitates refinancing, expedites sales, and strengthens negotiation positions.
• Consider selective disposals: Selling lower-yield or weaker units can help rebalance gearing and improve the overall financial health of a portfolio. Selling on one’s own terms is a sign of control rather than retreat. Landlords should also review guidance on calculating Capital Gains Tax before making sales decisions.

Professionalism as a Competitive Advantage

Decisions to sell, hold, or restructure property portfolios should be based on clear financial data rather than market noise. Professional landlords who approach these challenges methodically are better positioned to manage the effects of tax changes and regulatory developments effectively.

Looking Ahead: Support for Landlords

In response to the evolving landscape, the Landlord Association (TLA) is launching a new Trusted Partners Hub in the first quarter of 2026. This initiative will feature verified and approved service providers across legal, trades, insurance, financial, mortgage, tenant screening, and other sectors to support landlords, tenants, and property management businesses. Service providers interested in joining the Trusted Partners Hub can register their interest through the Landlord Association’s website.