Few would argue with the undeniable fact that landlords are in the authorities’s sights proper now because it seems at methods to fill the black gap in public funds.
With manifesto assurances that Labour is not going to improve earnings tax or VAT, chancellor Rachel Reeves isn’t precisely overwhelmed with different choices.
Hence the Treasury has recommended aligning capital positive factors tax (CGT) charges with earnings tax charges, which might considerably improve the tax burden on landlords. Add to that one other suggestion, to introduce National Insurance on rental earnings, and the temper music for property homeowners has arguably by no means been extra funereal.
What the market wants proper now could be encouragement — not punishment
True, there have been surveys hinting at extra constructive sentiment amongst the landlord fraternity. Only final month (September), Landbay reported that just about 60% of buy-to-let landlords had no intention of promoting any of their properties in the subsequent 12 months.
But context is all the pieces right here: Landbay’s polling of buy-to-let landlords (with portfolios totalling roughly 3,000 properties) was carried out in May 2025, nicely earlier than leaks of potential property taxes from the Treasury.
The reality is many landlords are already underneath the cosh and, if they’re subsequently instructed, ‘If you promote after April 2026, you’ll additionally pay greater CGT,’ will they be pondering it’s time to get out whereas they will?
As Shaw Financial Services proprietor and dealer Lewis Shaw places it: “That’s superb for one landlord however, if just a few hundred thousand all resolve to do the similar, are we taking a look at a possible fire sale? And who would possibly they promote to — their tenant, probably a first-time purchaser?”
Shaw says that is already occurring.
“I’ve taken extra calls from tenants who’ve been provided the probability to purchase their place from the landlord in the previous two months than I’ve in the previous decade.
If you dismantle the rental market, the doorways to proudly owning a house could unintentionally swing shut for a lot of
“I imply, buy-to-let hasn’t been an amazing funding for the previous few years however, if the authorities twists the knife, I can see it being a fire sale.”
Shaw provides: “To be sincere, I feel that’s in all probability the coverage. It will get the CGT coffers swelling, plus it’s a quick strategy to improve homeownership charges and the basic public aren’t going to shed tears over landlords. It looks as if a win/win for the authorities.”
Marchwood IFA director and mortgage dealer James Gordon sees the same image rising.
“I spoke to a consumer, a first-time purchaser, this morning. She was taking a look at a flat in TW1 [Twickenham area] that has traditionally been set free by a landlord however he’s determined to promote.
“It was initially marketed early this yr for £575,000 however she [the client] has had a proposal accepted at £500,000. She didn’t need to go above that as a result of the stamp obligation implications however, due to the landlord’s desperation to promote shortly, she has acquired it.”
Many landlords aren’t even breaking even. If a CGT tax rise begins in April 2026, they’ll rush to promote earlier than then
Gordon stresses that this isn’t an remoted incident.
“I feel, if first-time patrons are intelligent and know they’re taking a look at properties which have been, or are being, set free, current landlords will fortunately promote at a a lot cheaper price.”
Shaw argues that, for first-time patrons, October might be the greatest time ever to get on the property ladder.
“Rachel Reeves retains saying she gained’t increase taxes on working folks, but when she means it there is just one apparent transfer left — increase CGT charges to earnings tax charges.
“That would hit landlords exhausting. They are already underneath strain — the Renters (Reform) Bill, pricey EPC upgrades, rising mortgage charges. Many landlords aren’t even breaking even. And, if that tax rise begins in April 2026, landlords will rush to promote earlier than then.”
A fire sale might be the coverage. It appears a win/win for the authorities
Boon Brokers managing director Gerard Boon questions whether or not landlords being compelled to promote en masse will essentially assist first-time patrons.
“What the market wants proper now could be encouragement — not punishment,” he says.
“Landlords play an important position in maintaining rental costs aggressive, which in flip offers aspiring owners a sensible probability to lease for a time frame with the monetary freedom to avoid wasting.”
Boon argues that, by stripping away that incentive, you’re left with a monopoly of fewer properties, greater rents and a rental market that punishes the very folks policymakers are attempting to assist.
Landlords making rushed exits, Boon believes, would have a devastating knock-on impact and would probably destabilise native markets, with tenants left holding the brief finish of the stick.
If first-time patrons know that these properties have been set free, I feel current landlords will fortunately promote at a a lot cheaper price
“Furthermore, promoting these properties gained’t essentially create new owners — as a lot because it’s positioned in the mild of a assure. In actuality, it may merely shift possession to different traders or company landlords, doing nothing to handle the present affordability issues.”
Boon stresses {that a} thriving rental market is the unsung basis of a sustainable path to homeownership.
“Dismantle it,” he says, “and the doorways to proudly owning a house could unintentionally swing shut for a lot of.”
This article featured in the October 2025 version of Mortgage Strategy.
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