Most years bring updates to tax and lettings legislation that affect landlords, and 2026 is shaping up to be a particularly significant one. From changes to tax and compliance rules to shifts in interest rates and property standards, here are five key things landlords should be aware of this year - and how they could impact your finances and decisions.
1. Tax changes announced in the Autumn Budget
From 1 April, the National Minimum Wage is increasing to £12.71 for those aged 21 and over and £10.85 for 18-20-year-olds. For many tenants, this should help improve affordability and may support rental income over time.
The Budget also confirmed that the tax on rental income will increase by 2% across all rate bands from April 2027. While this change is still a year away, it’s important to understand how it may affect your long-term profitability and consider setting aside additional funds in preparation.
2. Making Tax Digital for income tax from April 2026
From 6 April 2026, landlords with gross annual property or business income above £50,000 will be required to comply with Making Tax Digital (MTD) for income tax.
This means:
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Keeping digital records of income and expenses
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Submitting quarterly updates to HMRC using MTD-compatible software
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Registering for MTD through HMRC online
Landlords earning between £30,000 and £50,000 will need to comply from April 2027.
3. Financial considerations under the Renters’ Rights Act
The Renters’ Rights Act, due to come into force on 1 May 2026, introduces several changes that may have financial implications for landlords, including:
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The removal of the option to request more than one month’s rent in advance, meaning alternatives such as guarantors may need to be considered
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Longer timeframes before eviction where tenants fall into arrears, which could increase the need for contingency savings
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A potential rise in the cost of professional letting and management services due to additional legal and administrative requirements
If you don’t currently have rent guarantee insurance, this may be worth reviewing as part of your risk management strategy.
4. Interest rates are expected to edge down
The Bank of England reduced the base rate to 3.75% in December 2025, with many forecasts suggesting it could fall further to around 3.25% by the end of 2026.
As mortgage rates often follow base rate movements, it’s sensible to review your borrowing regularly. Even if you’re on a fixed-rate deal, checking rates with a mortgage adviser every few months could help you plan ahead.
5. Investing in improvements ahead of future standards
Proposals that all rental properties may need to achieve an EPC rating of C by 2030, alongside the introduction of a new Decent Homes Standard, mean some landlords may need to invest in their properties over the coming years.
If you’re already planning renovations or considering purchasing a buy-to-let, making improvements sooner rather than later could help:
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Spread costs over time
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Avoid contractor shortages and rising material prices closer to deadlines
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Improve tenant appeal and potentially enhance long-term property value
If you’d like advice on improvements that attract and retain quality tenants, your local Reeds Rains lettings team will be happy to help.
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Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.
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