UK landlords face higher taxes, potentially increasing London rents

Key facts

• Landlords will pay 24%, 44% or 49% tax on rental income from April 2027.
• The tax increase is expected to push up rents for tenants.
• Some landlords may consider investing in other asset classes like share dividends.

The UK government's decision to increase property taxes for landlords is expected to drive up rental costs for tenants, particularly in London. The Autumn Budget included a 2 percentage point rise in tax on rental income, which will take effect from April 2027. This move has drawn criticism from property commentators who argue it will make life harder for renters already facing increased bills and could lead to fewer homes available on the market.