What the Budget Means for Your Rental

1. Mortgage Rates and Borrowing Costs

While the Budget doesn’t directly control mortgage rates, the government’s economic stance heavily influences them. With forecasts showing stabilising inflation and a cautious approach to public spending, lenders are expected to maintain competitive rates — good news if you’re remortgaging or expanding your portfolio.

What this means for you:

• Potentially lower monthly mortgage costs.

• Better lending options if you’re planning to refinance.

• More stability when forecasting your rental profits.

2. Tax Relief and Allowance Changes

Several tax-related points in the Budget will matter to landlords:

Reduced Capital Gains Tax (CGT) for Property

The Budget continues with reduced CGT rates that make it less painful to sell a property. This could help landlords wanting to offload underperforming assets or rebalance a portfolio.

Personal Allowance & Threshold Freeze

The freeze on income tax thresholds continues — meaning some landlords may pay more tax on their rental income simply because of inflation pushing them into higher bands.

How this affects you:

• Higher taxable income without earning more.

• Better exit opportunities if selling a rental is part of your strategy.

3. Changes to Local Housing Allowance (LHA)

The Budget confirmed that the Local Housing Allowance will be maintained at the newly increased levels. This is particularly important for landlords who let to tenants receiving housing support.

For your rental:

• Higher achievable rents in some areas.

• A more reliable income stream if your tenants use LHA.

• Improved demand for affordable rentals.

4. Energy Efficiency & Property Standards

While the Budget did not introduce new EPC requirements, funding has been allocated to support energy-efficiency measures nationwide. This hints at future tightening of minimum EPC standards — even if timelines remain unclear.

What to consider:

• Grants or schemes may become available to upgrade your rental.

• Higher standards in the future are still likely.

• Improving efficiency now may boost rental appeal and reduce long-term costs.

5. Support for Small Businesses (Including Landlords)

Landlords operating as limited companies will benefit from business-focused support in the Budget, including:

• Extended full expensing on qualifying investments.

• Simplifications to filing and administrative processes.

These changes could reduce tax burdens and free up cash for improvements, maintenance, or portfolio growth.

6. Demand for Rentals Expected to Stay High

With no major changes to significantly boost housebuilding, supply pressures remain. Combined with ongoing affordability challenges for buyers, demand for rental homes is set to remain strong throughout 2025.

This means:

• More tenant enquiries.

• Lower void periods.

• Potential for rent increases (within fair and legal limits).

Final Thoughts

Overall, the Budget is a mixed bag for landlords — offering some financial breathing room through stable interest rates, better CGT opportunities, and continued LHA support, while also reinforcing the trend of rising tax pressure due to frozen thresholds.

For most landlords, the key takeaway is stability. The rental market remains strong, demand shows no sign of dropping, and the regulatory environment isn’t throwing any unexpected curveballs — for now.

If you need any help with your planning, or just a freindly face to help out with your property, get in touch today!