Landlords need breathing space as costs and regulation rise

The latest Budget has delivered another blow to landlords, with a further increase in property income tax adding to the financial pressures already facing the private rented sector.

From April 2027, property income tax rates will rise to 24%, 44% and 49%, depending on the individual's tax band. It's another consideration for landlords already balancing higher borrowing costs, maintenance expenses and increasing regulatory responsibilities.

But the Budget is only part of the picture.

The introduction of the Renters' Rights Act earlier this year brought significant changes to the private rented sector, including the abolition of Section 21 'no-fault' evictions, new tenancy arrangements and changes to how rents can be increased.

Further reforms are still to come.

While improving standards and protecting tenants are important objectives, the cumulative effect of these changes is creating an increasingly complex environment for landlords.

For many, the challenge isn't necessarily a lack of appetite to invest. It's managing cashflow, protecting profitability and having the flexibility to respond to changing circumstances.

And that's where the right finance can make a difference.

Somo developed its Landlord’s Breathing Space product, offering funding over 12 to 24 months with no monthly repayments, to alleviate pressure when managing property improvements, refinancing or portfolio restructures.

It's about giving landlords the financial flexibility to navigate challenges while remaining ready to take advantage of new opportunities.

Despite the challenges, there are still opportunities in the property market, particularly for experienced investors who understand where value can be added and how to maximise returns.

The latest Budget reinforces something we've been seeing for some time: landlords are having to work harder to make their investments stack up — in an environment where costs and responsibilities continue to rise, giving them a little breathing space could make all the difference.