## Tax Rise to Increase Rental Costs for Tenants

The National Residential Landlords Association (NRLA) has highlighted the impact of the UK Government’s planned tax increase on rental income, which is set to rise by two percentage points starting in 2027. This change, announced in the Chancellor’s latest Budget, is expected to lead to higher rents as landlords seek to offset increased tax liabilities.

Ben Beadle, NRLA Chief Executive, emphasised the consequences: “Hiking taxes on rented housing will lead to higher rents.” He questioned the effectiveness of this policy in addressing the current cost-of-living crisis, which ministers have identified as a top priority.

## Survey Reveals Landlords’ Concerns Over Tax and Costs

The NRLA’s survey found that 65% of landlords intending to raise rents within the next year attribute their decision primarily to the forthcoming tax hike. Broader property running costs were cited by 68% of respondents, making it the most common reason for rent increases.

These findings underline the financial pressures landlords face, which are likely to be passed on to tenants through increased rents. The survey also reflects wider anxieties about the private rented sector’s future, particularly in light of recent legislative changes.

## Impact of Ending No-Fault Evictions and Court Delays

Beyond taxation, landlords are increasingly worried about the implications of the planned abolition of Section 21 no-fault evictions, due to take effect in the coming months. The NRLA reports that 91% of landlords are either very or slightly concerned about delays in court proceedings for possession cases.

Official data indicates that possession cases under the new system are now taking over seven months on average to process and enforce, marking the slowest turnaround since early 2022. Ben Beadle noted, “Ministers have pledged to ensure the justice system is ready to process cases where landlords have good reason. However, as of yet, they have failed to explain what ready means.”

## Tenant Demand Remains Strong Despite Supply Challenges

Despite these challenges, tenant demand in the private rented sector remains robust, with 61% of landlords reporting continued strong interest from renters. However, supply appears to be tightening, as 24% of landlords said they sold properties over the past year, while only 5% expanded their portfolios.

Notably, 27% of landlords who sold properties did so with tenants still residing in them, indicating a complex market dynamic where landlords are exiting while demand persists.

## What This Means for UK Landlords

The combination of increased taxation, rising operational costs, and legal uncertainties presents a challenging environment for landlords. Rent increases appear likely as landlords adjust to higher tax bills and ongoing expenses. Additionally, delays in possession proceedings may complicate property management and tenant relations.

Landlords should prepare for these changes by reviewing their portfolios and financial planning, while staying informed about evolving legislation affecting the private rented sector.

Suggested internal link anchors

– rental tax increase
– private rented sector
– no-fault evictions
– Section 21 eviction
– landlord tax changes
– court delays possession cases
– tenant demand UK
– property running costs
– rent rises
– NRLA survey findings
– landlord concerns
– cost-of-living crisis impact

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/