The Intermediary – December 2025 - Flipbook - Page 61
AU T U M N B U D G E T
Rapid reaction
provides a stable foundation on which to move
where a professional letting agent can make a
forward, and this stability will be welcomed by
real difference.
a market that has already shown significant
resilience throughout 2025.
“The new surcharge on homes above £2m will
“The private rental sector [PRS] recently saw
the biggest shift in a generation with the passing
of the Renters’ Rights Act. While this regulation
importantly not take effect until 2028, so we
presents significant change, it also raises the bar
have ample time to adjust and plan with our
for professionalism and creates opportunities
clients. London’s prime market, in particular,
for the sector, which is what the industry really
remains robust, and buyers at this level typically
needs to continue growth and momentum.
plan purchases over a longer horizon, meaning
the announcement can be accounted for in
these plans.
“The rental sector continues to evolve,
“For landlords, the combination of the Budget
and the Renters’ Rights Act introduces new
responsibilities and financial considerations.
However, the clarity we now have means property
and despite the unwelcome incoming tax
is still an excellent place to invest for the long
adjustments, we expect rental inflation to
term, with yields increasing in many areas of
remain strong over the coming years.
“With demand still far exceeding supply,
the country, interest rates on the way down, and
decreased landlord competition. I also believe
rental values are set to rise at a pace that is
the [Act] could lead to longer tenancies which
likely to outstrip the relatively small increase
will ultimately minimise voids again boosting
in taxation, supporting stronger short and
the sector’s attractiveness.”
medium-term returns for London’s landlords. In
this environment, informed guidance from an
expert agent will be essential to help investors
capitalise on these conditions and maximise
yields. Overall, the Budget provides a stable
backdrop as we move into 2026, setting the
stage for momentum to build after a period
of uncertainty.”
Sam Mitchell
CCO at Lomond
Ben Beadle
CEO at the NRLA
“The Budget presents significant challenges for
the PRS and the effects will be felt most acutely
by low-income renters. The decision to increase
Income Tax on property income from April
2027 comes on top of a decade of piecemeal
tax changes, all of which have steadily eroded
returns for individual landlords.
“The Office for Budget Responsibility has been
“The Chancellor’s Autumn Budget introduces
explicit that these measures will push rents
significant changes that will reshape the
upwards, and the Institute for Fiscal Studies is
property sector, but it also delivers the clarity
clear that taxing property income will increase
the industry really needs after months of
costs for tenants.
uncertainty and speculation.
“Landlords tell us they want certainty, practical
“For brokers, the implications are already
visible: buy-to-let [BTL] lenders are likely to
guidance, and the confidence to make the right
require higher rents at renewal to maintain
decisions. While recent uncertainty has slowed
affordability ratios. As taxation rises and
the market’s natural momentum, now is the
financing costs remain elevated, these stress
time to act decisively to protect investments.
tests will inevitably feed through into further
Working with professional lettings and sales
rent increases.
agents will help ensure landlords, tenants,
homeowners and buyers stay up to date with
“These tax decisions are compounded by
confirmation that Local Housing Allowance
any changes that affect them, and protect
rates will remain frozen for a second year in
property interests. With the right support and
2026/27. With fewer than three in every 100
preparation from informed agents, landlords
private rented properties affordable to people
can continue to manage their assets confidently
receiving housing benefit, the freeze will make it
and maintain strong, stable tenancies, even in a
even harder for those on the lowest incomes to
shifting policy environment.
access or sustain a tenancy.
“The Treasury’s decision to increase income
“At the same time, overall support for green
tax rates on property income with new separate
home upgrades has been reduced by a quarter,
property tax bands of 22%, 42% and 47%
from £20bn to £15bn over this Parliamentary
mean that it is more important than ever for
term, despite the Government’s ongoing
landlords to plan ahead for tighter margins
consideration of ambitious energy efficiency
and reassess investment strategies. This is
targets for the sector.
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