Several months on from the Autumn Budget 2025, its implications for the private rented sector are becoming increasingly clear. Among the most significant measures was the 2% increase in tax on rental income. While intended to raise short-term revenue, it is adding further strain to an already fragile market.
For small and mid-sized landlords, this tax rise has landed alongside rising compliance obligations, inflation-driven maintenance costs, and the anticipated impact of the Renters’ Rights Act. Taken together, these pressures are forcing many landlords to reassess whether continuing to let property remains financially viable.
As a business working directly with over 30 local authorities and hundreds of landlords across London and the Southeast, Elliot Leigh see the reality behind the headlines. Many landlords want to remain in the sector, but an increasing number are choosing to exit. The result is a steady loss of good-quality homes from the private rented market, at the very moment councils are facing growing demand to house families in crisis.
While the government’s need to raise revenue is understandable, the cumulative effect of recent policy decisions risks destabilising a sector that plays a critical role in meeting national housing demand. For many local authorities, private landlords are not optional partners. They provide essential housing for households with few alternatives. When landlords leave the market, it is not just supply that shrinks, but a vital safety net for thousands of families.
Notably, the Autumn Budget offered little in the way of counterbalance. There were no reforms to stamp duty, no new incentives to encourage investment in rental housing, and no clarity on how local authorities are expected to meet rising demand with already stretched resources.
Experience shows that policies affecting the private rented sector often have unintended consequences. Reduced supply leads to higher rents, increased competition, and greater reliance on emergency and temporary accommodation. From our work with local authority partners, it is clear many are already struggling to secure enough suitable homes. This challenge continues to intensify.
Rather than pushing responsible landlords out of the market, a more balanced approach is needed, one that aligns fiscal responsibility with housing stability. This means recognising the role the private rented sector plays, particularly where social housing supply is limited and councils depend on private landlords to prevent longer waiting lists and homelessness.
Months on from the Budget, the message from the front line is consistent. Landlords need confidence and stability, not further uncertainty. A sustainable housing system depends on a private rental sector where landlords can afford to let and tenants can afford to stay. Without a more joined-up, long-term strategy, the pressures facing the system will only continue to grow.
