Landlords warn new tax rises could worsen rental shortage
Landlord research carried out by mortgage market specialist Pegasus Insight reveals deep anxiety in the buy-to-let sector ahead of the 26 November Budget, with widespread concern that further tax increases could accelerate landlords’ withdrawal from the Private Rented Sector.
According to the latest Landlord Trends Q3 2025 report, the proposed 8% National Insurance (NI) charge on rental income has become landlords’ number one concern, with more than eight in ten (81%) describing it as ‘very concerning’.
Nearly three quarters (73%) say they are very concerned about potential changes to Capital Gains Tax (CGT) on property sales, rising to 85% among those who have sold or intend to sell property in the coming year.
The findings follow evidence that 40% of landlords plan to sell at least one property in the next 12 months, while only 7% plan to buy, signalling the continuation of a supply squeeze that has already driven rents to record highs.
Mark Long, founder and director of Pegasus Insight, commented: “The tax burden is now seen by landlords as every bit as threatening as regulation. The possibility of a new National Insurance charge on rental income is causing alarm across the sector, not just because it would erode profitability, but because it would further undermine confidence in what has already become a heavily taxed form of investment.
“Many landlords feel that another policy shock, on top of CGT and the Renters’ Rights Act, could tip the balance and force them to sell.”
Long added that the cumulative impact of new taxes could have damaging consequences for both landlords and tenants.
“Every indication from our data is that a growing number of landlords are reassessing their position. If the November Budget adds yet another layer of taxation, we can expect more to exit the market in 2026, further reducing rental supply at a time of rising demand.
“The government needs to tread carefully — short-term revenue gains could come at the expense of long-term housing stability.”