Budget 2026: Tax raid on landlords ‘final nail in the coffin’ for rental sector

John Healey’s decision to push up tax on rental income is set to push up rents and deter new landlords from entering the sector. The Chancellor said in the Budget that tax on property income will rise by a further two per cent, following the two per cent hike imposed by his predecessor, Rachel Reeves, last year. The Office for Budget Responsibility (OBR), the fiscal watchdog, has told the Treasury that this tax raid will cause landlords to push up private rents, prompting estate agents to accuse the government of “lunacy”. The additional hike on income from property means that tax on rent will rise by four per cent from April next year. The Treasury claims this will affect only 16 per cent of income tax payers, with half of the revenue raised set to come from the top 10 per cent of households. But the OBR has issued a stark warning to the Chancellor that this tax hike will be the latest of a series of recent measures which have “reduced private landlord returns”. Th