Almost two thirds of landlords say they would look to recoup higher tax costs through increased rents, as concern grows over further financial pressures on the private rented sector ahead of the October 2026 Budget.

The latest Landlord Trends research from Pegasus Insight found 88% of landlords are concerned about the 2% increase in income tax rates applying to rental income from personally held properties, up three percentage points from the previous quarter.

Mark Long, founder and director of Pegasus Insight, said: “The Private Rented Sector needs a period of stability. Further tax increases or additional costs could change landlord behaviour in ways that ultimately affect tenants through higher rents, reduced choice or fewer homes available to rent. The Budget should not add to those pressures.”

Some 64% of landlords said they would look to recover losses through higher rents, while 83% agreed that tax and regulatory changes would make them more selective about the tenants they are prepared to let to.

Landlords are also concerned about implementation of the Renters’ Rights Act, with 91% saying they are ‘very concerned’ about potential court backlogs when seeking possession.

Pegasus Insight’s separate Tenant Trends research found the typical renter now pays £917 a month, 11% more than a year earlier. Among tenants who had lived in their property for at least a year, 46% experienced a rent increase during the previous 12 months.