Is This the End of the Road for Landlords? Why the 2% Tax Rise Might Be the Breaking Point — or a Turning Point

Here at The Tax Faculty, we’ve been taking a close look at the latest announcement: a 2% rise in property income tax from April 2027. For many landlords already feeling worn down by years of change, this feels like another heavy blow. But is it really the final straw — or could it be the push that reshapes the sector for good?

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The Tax Faculty

1/21/20262 min read

“Is It Still Worth It?” — The Question We Hear Every Week

Here in Durham, that question is coming up more and more in conversations with our landlord clients. Whether it’s owners of a single buy-to-let in Chester-le-Street, student lets in Durham City, or small portfolios across the North East, the feeling is much the same.

Tax changes, higher mortgage costs, stricter compliance rules, and rising maintenance bills have all chipped away at margins. For some landlords, what once felt like a steady, long-term investment now feels like hard work for diminishing returns. The planned 2% tax rise has simply brought that frustration to the surface.

While this increase feels like a fresh blow, it didn’t come out of nowhere. Over time, property income has been brought closer into line with other forms of income for tax purposes. From our perspective, the direction of travel has been clear for a while. The system is clearly nudging landlords away from being “hands-off” owners and towards a more professional approach — better records, clearer structures, and a longer-term view.

For some Durham landlords, especially those with smaller or heavily mortgaged portfolios, the sums may no longer stack up. We are already seeing some of our clients contacting us for advice after considering selling up or scaling back, particularly explaining that the stress of it all now outweighs the reward.

Trying to think positively, we could consider this to be a turning point and not just a breaking point.

The real issue isn’t simply whether landlords can absorb another tax rise. It’s whether they’re prepared to adapt. For some, that might mean changing ownership structures. For others, it could mean refocusing portfolios, improving efficiency, or deciding that now is the right time to exit — and doing so in a planned, tax-aware way.

From where we sit, 2027 feels like a genuine turning point and we're her to help support our landlord clients in any way that we can, no matter what direction they chose to take.

The key is not to drift into 2027 unprepared, but to take stock now and make informed decisions about what comes next.

If you’re a landlord wondering whether it’s still worth it — you’re not alone. And a conversation sooner rather than later can make all the difference.

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