On October 28th, 2026, Chancellor of the Exchequer John Healey delivered his first Budget. This was also the first Budget of the relatively new Burnham Government. As to be expected in the current political climate, it had brought another financial squeeze on landlords, while offering tenants a number of measures designed to ease the cost of living.
While the Government has announced measures to help first-time buyers, support housing delivery, and ease general household costs, this budget offers few specifics for the Private Rented Sector (PRS).
Here, we explore the key announcements and what they could mean for landlords, renters and letting agents.
The biggest Budget announcement for landlords is a further 2% increase in tax on income from property and savings, coming into effect from April 2027. This is on top of the increases previously announced by Rachel Reeves, taking the rates to 24%, 44%, and 49% for basic, higher and additional rate taxpayers, respectively.
In short, this means that a greater share of landlords’ rental income could be eaten up by tax, adding to the cost of managing their properties. While the impact will vary depending on the landlords’ circumstances, the change will likely prompt some to take a closer look at their portfolios. Overexposure could be a deciding factor for landlords potentially leaving the market.
For letting agents, this creates an opportunity to have proactive conversations with landlord clients. Understanding how the changes may affect individual landlords, and helping them assess their options, will be important as they review their finances and the costs of property management.
The challenge is particularly significant in a market already facing regulatory change. Goodlord’s Is Renting Broken? research found that 59% of landlords identified high fees and poor value as their biggest frustration with letting agents, while just 6% said they were very satisfied with value for money.
As landlords come under greater financial pressure, agents may find that clients scrutinise their fees more closely. Making the work behind those fees visible, from compliance and referencing to communication and day-to-day management, will be key to demonstrating why professional support remains worthwhile.
Alongside an increased tax burden for landlords, the Chancellor announced several measures to help people buy a home, ease household costs, and increase housing supply.
The headline measure was the £4.7bn “Your First Home” scheme, aimed at helping 70,000 first-time buyers onto the property ladder and supporting an estimated 20,000 new homes. Eligible buyers can put down a deposit of just 2.5% and access a government equity loan worth 20% of the purchase price, with no interest for the first five years.
The government has also announced a new First Time Buyer ISA, planned for April 2029 and replacing the current Lifetime ISA scheme, and a further £1.5bn for social and affordable housing, including around 10,000 homes for social rent in England. These measures are part of a wider effort to improve access to home ownership and increase housing supply.
For households, the Budget includes a £100 energy payment for eligible homes in council tax bands A to D, alongside changes intended to reduce energy costs. While this may provide some short-term relief, it does not directly address the longer-term challenges of housing affordability.
For the private rented sector, the overall impact remains to be seen. Support for first-time buyers could help some renters move into homeownership, while new investment in social and affordable housing may increase supply in these segments over time. But with the independent Office for Budget Responsibility forecasting that the overall impact of government policies will see 190,000 fewer properties than predicted being built, there is little prospect of any immediate easing of rent pressure or lowering of costs for landlords.
The Budget's full impact on the private rented sector will take time to emerge. The property income tax increases won’t take effect until April 2027, giving landlords time to review their finances and decide how best to manage their investments.
In the meantime, letting agents should expect more questions from landlords about costs, returns, and the future of their portfolios. Proactive conversations can help agents understand individual concerns, explain the support they provide and identify where landlords may need additional guidance.
Agents should also track how wider housing measures develop, including the Your First Home scheme and additional investment in social housing. While these initiatives may influence the housing market over time, their impact on rental demand and supply remains uncertain.
The Budget may change the financial pressures landlords face, but the opportunity for letting agents remains the same: to demonstrate that good management is more than a cost. It is a service that helps landlords navigate an increasingly complex market.