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The UK continues to see rising rental costs, and recent surveys show that many landlords are planning further rent increases over the next year. One of the key reasons they point to is the new tax on property income introduced by Chancellor Rachel Reeves.
According to the National Residential Landlords Association (NRLA), around two thirds (about 65%) of landlords who intend to raise rents directly link this decision to the new tax on rental income. The additional two‑percentage‑point charge on property income is due to take effect from April next year and, according to government estimates, could raise hundreds of millions of pounds by 2030.
What is happening to UK rents?
Even before the tax was announced, the rental market was under pressure. Official data from the Office for National Statistics (ONS) shows that rents have been rising faster than house prices. Over the 12 months to December, average private rents increased by roughly 4%, while average house prices rose by around 2.5%.
For many households this means that a growing share of their monthly income goes on rent, while saving for a deposit becomes harder. In this environment, any new taxes or extra costs for landlords tend to be passed on to tenants through higher rents.
Why are landlords putting prices up?
The new tax on rental income is not the only factor, but it has become a clear trigger for many property owners. The NRLA survey of around 800 members suggests that:
- Many landlords feel that the additional tax burden makes letting less profitable.
- Some are considering leaving the rental market altogether by selling properties that used to be let out.
- Others prefer to pass the extra costs on to tenants, gradually increasing monthly rents.
On top of tax changes, landlords face rising maintenance costs, energy‑efficiency requirements, higher insurance premiums and further regulatory changes to the rental sector.
How does this affect tenants?
For tenants, the situation is becoming increasingly challenging. Besides higher rents, there are other risks and inconveniences:
- A shrinking supply of rental homes if some landlords decide to sell their properties.
- More frequent rent reviews, especially when tenancies are renewed.
- Uncertainty around evictions and the courts: the end of “no‑fault” evictions worries landlords, while court backlogs mean months of waiting in the event of disputes.
Internal government estimates suggest that it can currently take around seven months to regain possession of a property through the courts, which increases anxiety for both landlords and tenants.
In this environment, more and more people are asking themselves: if rent keeps going up every year and my housing situation feels uncertain, would it make more sense to look into buying my own place, especially if I plan to stay in the UK for several years or longer?
Renting vs buying: how are people thinking?
Rising rents and tighter rules are pushing many households to rethink their long‑term plans. Even for those who saw homeownership as a “someday” goal, questions like these are becoming more common:
- “If I already pay £1,200–£1,500 a month in rent, wouldn’t it be better to pay a mortgage instead?”
- “How much deposit do I actually need to get started?”
- “Are there schemes or mortgage products that can help me buy my first home?”
The right answer depends on many factors: income level, job stability, savings, credit history and your plans for the next 5–10 years. But the trend is clear: as rents rise, more families are comparing their monthly rent with a potential mortgage payment and wondering whether it is time to take the step towards owning a home.
Is buying your own home right for you?
Buying a property in the UK is a major decision that needs to be assessed individually. In general, purchasing a home may be worth exploring if you:
- Plan to stay in the UK for at least a few years and do not expect drastic changes in your career or family situation.
- Can save up a deposit (possibly with help from family or a partner).
- Have a stable, provable income.
- Are prepared for additional costs such as legal fees, valuation, insurance and potential repairs.
Homeownership is not a magic solution, but it can be a sensible financial step. In a world of rising rents, many people see a mortgage as a way to stabilise their monthly housing costs and stop “paying someone else’s mortgage” through rent.
If you are thinking about moving away from renting forever and want to understand whether buying a home in the UK is realistic for you, the best first step is a one‑to‑one consultation.
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📌 Original City A.M. article:
https://www.cityam.com/majority-of-landlords-to-hike-rent-due-to-reeves-tax-raid/
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The information above is of a general nature and does not constitute personal financial advice. Lending criteria, interest rates and product availability depend on your individual circumstances and on each lender’s requirements in the UK.
