Budget changes and what they mean for landlords and advisers

Originally published by The Intermediary

The pre-Budget noise we all heard was perhaps louder in the lead up to this announcement, than any in recent memory.

Certainly, the sheer range of options and potential policies that were being ‘tested’ out in the marketplace made it feel like we would see some sizeable changes, not least for landlords.

The rumours for our sector centred on the Chancellor planning to introduce payment of National Insurance contributions on individual landlords’ rental income, but instead she opted to raise property income tax rates on rental income from April 2027.

From then, basic, higher and additional rates will rise to 22%, 42% and 47%. This is expected to bring in around £0.5bn a year once fully in place. For landlords, it means another cost to plan for at a time when many are already dealing with higher outgoings.

This announcement, of course sits alongside the work landlords will be carrying out to get ready for the Renters’ Rights Act and, as we know, this work is not small in scale and will add further costs for them.

Our Guide has now been updated to reflect the recent timing announcements, with a significant number of implementation required from the 1^st May 2026, not least the move of ASTs to Assured Periodic Tenancies, the abolition of S21 evictions, rent increases only be allowed once a year, for example.

Other requirements such as the launch of a new PRS Landlord Database, and the establishment of a Private Landlord Ombudsman won’t happen until late next year, while the introduction of the Decent Homes Standard for the PRS may not happen for another decade.

Most landlords will need time to work through each part but the clock is certainly ticking and, when you add in the Budget announcement, it adds another layer to a period already marked by planning and adjustment.

It is fair to say the tax rise will influence how landlords assess their costs. As mentioned, from next year, rent can only be increased once a year through the S13 process, but landlords must show the figure reflects the market and give two months’ notice.

As I write, and as you read this, it’s obvious that many landlords will be looking again at their numbers for next year and beyond. And if they’re not, then they probably should be.

The Budget change, plus the need to meet the increased responsibilities that come with the Act, should probably prompt closer rent reviews than might otherwise have taken place. In that sense, advisers should expect more questions from clients who want to understand what is permitted, what is practical, and how to plan ahead.

Another area to watch is how landlords choose to hold their properties in future. The direction of travel has been clear for some time, with many favouring limited company structures.

Our most recent Rental Barometer showed 81% of buy-to-let applications to us coming from limited companies rather than individuals, and this Budget tax change is likely to support (and grow) that pattern. Advisers cannot offer tax advice, but they can help clients think through what this means for their portfolios, how finance differs between personal and company structures, and what is possible if a client does wish to explore this route.

Some may even ask more seriously whether it is worth moving existing properties into a company. This is not a simple step, as there are stamp duty and legal costs to consider. But if a landlord intends to hold a property for many years, the long-term comparison between higher ongoing taxes and a one-off cost now may lead to a different conclusion than before. Advisers can help clients understand the practicalities, including how existing portfolio equity could be used to meet the costs and how this might affect future funding.

The Act will bring a shift in how landlords manage their properties. The move away from fixed terms will change how they approach renewals and voids. The new rules on setting and adjusting rents will mean a more structured approach to rent reviews. And the new duties linked to landlord registration and the Ombudsman will require a more organised approach overall.

Advisers who understand these points will be better placed to support clients, not just with finance but with clear guidance on what they need to prepare for.

Our guide was created to help with this, offering checklists for each part of the Act and breaking down the changes step by step.

You might wish to use this in order to structure conversations with landlord borrower clients and to help those unsure about what the rules truly mean for them. Awareness amongst landlords is still mixed, so there is a clear role for advisers to provide straightforward information and help clients take early action where needed. There’s no doubting that next year, and beyond, is going to have a different feel to it in this space and it will pay to communicate regularly and effectively with those clients impacted.

Which leads me to finally say that, as this is my final article of the year, I’d like to wish all readers of The Intermediary a very merry Christmas and a happy new year.

The sector will continue to change in 2026, but with early planning and good support, advisers and lenders can help landlords meet the new requirements with confidence and make the most of the opportunities that exist.