Landlord tax will 'hit supply of homes and push up rents'

Finance expert says Budget decision will lead many to sell up

- DAVID MADDOX

Rachel Reeves’s new landlord tax will cause the rental market to “dry up” and push record-high rents even higher, a leading figure in the property market has said.

In a stark warning to the chancellor, Simon Gammon, the founder and managing director of mortgage brokers Knight Frank Finance, said her Budget decision to hike tax on landlords' rental income by 2 per cent will be the "last straw" for many, forcing them to sell up.

He said: "The nonsense is that the more properties that come to the market, the less they will be available for rental, and therefore the rents will continue to go up. Which doesn't help anybody."

It comes after it emerged that the Treasury failed to conduct an impact assessment in respect of how the new levy would affect rents or housing supply. In the past two years, average rents in the UK have risen substantially – by 8 per cent in 2023 and 9 per cent in 2024. The highest rises were seen in London, where rents went up by 11.5 per cent last year.

Mr Gammon described the way landlords are being forced to sell up as “like death by a thousand cuts”.