Nearly three quarters of landlords expect to increase rents following the Budget’s changes to rental income tax, and more than half are considering selling properties over the next 12 months, new research has revealed.

A snap poll by Pegasus Insight of 168 National Residential Landlords Association (NRLA) members found that 73% expected the tax increases to push up rents when they are next able to raise them.

The largest group (38%) anticipated increases of between 5% and 10%, or to market levels if higher, while 11% expected rises of more than 10%. A further 24% anticipated increases of less than 5% or to market levels.

The changes will see rental income tax rates for landlords holding properties personally rise to 24%, 44% and 49% from April 2027, following increases announced in this year's and last year's Budgets.

The poll also found that 52% planned to sell some or all of their rental properties over the next year, including 38% intending to sell part of their portfolio and 14% planning to exit the market entirely.

Just 2% expected to buy additional properties, while 26% anticipated no changes.

Mark Long, director of Pegasus Insight, said: "The industry has repeatedly warned that increasing taxes on landlords risks increasing costs for tenants. Announcing another two percentage point rise before the previous increase has even taken effect suggests those warnings have gone unheard.

"The comments behind these figures are particularly telling. Landlords describe the increases as a stealth tax on tenants and question how they can keep investing in their properties."

Almost three in ten landlords (29%) also expected to reduce spending on property maintenance or improvements, including 13% planning significant cuts. However, 55% expected their spending to remain unchanged.

Long added: "The Government needs to consider what it is asking landlords to deliver and whether its tax policy supports that. Tenants need good quality homes at rents they can afford, and providing those homes requires continued investment. Squeezing the income available to fund that investment risks undermining those ambitions.

"These are immediate reactions, and intentions to raise rents or sell will not all become reality. But the strength of the response should give the Government serious pause for thought."

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