The 2025 UK Budget
The 2025 UK Budget - delivered by Rachel Reeves, has reshaped the private rental market in an unprecedented way. With higher taxes on rental income, no changes to stamp duty, and fresh charges on high-value properties, the landscape for both renters and landlords is shifting fast. In this article, we break down what’s new — and why it matters for anyone searching via Bills Included.
🔎 Key budget changes affecting landlords & rentals
According to reporting by LandlordZONE, the main take-aways for landlords and renters are: LandlordZONE
- A 2% increase in income tax on property income — from April 2027, property income will be taxed at 22% / 42% / 47% bands. NRLA+1
- A new High-Value Council Tax Surcharge (often dubbed a “mansion tax”) for homes valued over £2 million, due to begin in April 2028. LandlordZONE+1
- No new Stamp Duty increases and no new National Insurance on rental income — despite speculation. LandlordZONE+1
- Freeze on income tax thresholds for at least the next few years, increasing the risk of “fiscal drag” (pushing more taxpayers into higher brackets). Simply Business UK+1
📈 What this means for landlords & rental supply
The 2% tax increase is a direct hit to rental profitability. Experts from National Residential Landlords Association (NRLA) warn that reduced returns will discourage investment in rental properties — and could shrink the supply of homes to rent. NRLA+1
Fewer buy-to-let homes in the market usually equals higher rents. With demand already strong and supply stretched, tenants may soon face tougher competition — especially in student and shared houses typical of Bills Included’s clientele.
Meanwhile, the new surcharge on high-value properties may push some landlords to sell luxury or high-end rental units, further tightening supply at the upper end. LandlordZONE+1
🏠 Why renters need to watch this closely
As supply tightens, tenants could see:
- Fewer available rental units
- Faster turnover and more competition for decent properties
- Potential rent hikes, especially where landlords need to offset higher tax burdens
For renters with tight budgets - including students and young professionals (many of whom use Bills Included homes) - this makes it even more important to know your rights and act quickly when you spot a good listing.
⚠️ Why this budget makes the upcoming Renters’ Rights Reforms even more critical
With higher costs for landlords on the horizon, reliable renters risk losing out unless protections stay strong. The upcoming Renters’ Rights Act 2025 (RRA) - which bans “no-fault” evictions, mandates open-ended tenancies, and raises property standards - becomes more vital than ever to ensure homes remain fair, safe, and accessible.
Bills Included has already embraced many RRA principles earlier; this Budget makes adopting tenant-first practices not just ethical - but essential.
✅ What renters & investors can do next
| For Renters | For Landlords / Investors |
|---|---|
| Understand your rights under RRA - you may get more security despite market shocks. | Re-assess rental yields - factor in higher tax rates and potential council surcharges before investing. |
| Lock in longer-term deals where possible; demand transparency on rent and fees. | Consider value-add strategies (e.g. refurbishments, energy efficiency) to maintain yield quality. |
| Explore alternative rental models (e.g. shared housing, student flats). | Run updated budget forecasts - account for rising costs and shifting supply/demand dynamics. |
🔗 More reading & sources
- LandlordZONE’s full breakdown of Budget 2025 for landlords LandlordZONE
- NRLA’s response and tax-impact analysis for the private rented sector NRLA+1
- SimplyBusiness summary of Budget measures for landlords and income tax changes Simply Business UK
Lets summarise
The 2025 Budget doesn’t overhaul the rental market overnight - but its ripple effects may be felt for years. With higher landlord taxes and new costs for high-value properties, supply pressure is likely to increase. That makes tenant protections, like those embedded in the Renters’ Rights Act 2025 crucial.
For renters searching for homes, transparency, flexibility and fairness will be more important than ever. For landlords and property investors, planning ahead with realistic cost projections is key. At Bills Included, we believe in both, good homes and smart investing.