Property-income tax rates are set to rise by a further 2 percentage points from April 2027. Mortgage-industry reporting describes this as taking the cumulative increase in tax on rental income to 4%, raising fresh concerns about rental profitability, property disposals and the future supply of private rented homes.
The pressure comes alongside higher refinancing costs and the absence of stamp duty reform in the Budget. Advisers working with landlords should revisit cash flow, interest-cover calculations, ownership structures, planned rent changes and longer-term exit strategies. The outcome will vary materially by portfolio, tax position, debt structure and local rental demand.
- Use scenario tools to compare rate, tax and void-period assumptions across a portfolio.
- Review product transfers as well as remortgage options; lenders including Foundation have refreshed selected residential and BTL transfer products.
- Where AI is used to analyse documents or model options, protect client data and check outputs carefully for tax and underwriting assumptions.