Most years, there are changes to tax and lettings legislation that impact landlords, and 2026 is no exception. Here are five things to know about that could affect your finances and financial decisions this year.
- Tax changes announced in the Autumn Budget
From 1 April, the National Minimum Wage is rising to £12.71 for over-21s and £10.85 for 18-20-year olds. This should help rent affordability for tenants on lower incomes and support rent increases.
The other notable change announced in the budget is that tax on rental income is set to increase by 2% for all rate bands. Although this doesn’t take effect until April 2027, make sure you check how this will affect your profits, and it may be worth starting to set aside slightly more of your rental income in preparation.
- Making Tax Digital (MTD) income tax rules take effect from 6 April 2026
Landlords with gross annual business or property income of more than £50,000 will need to be registered with Making Tax Digital and submit quarterly returns to HMRC via MTD compatible software.
Qualifying landlords will need to get compatible software for creating and storing income and expenses digitally and sign up for MTD via HMRC online.
Those earning between £30,000 and £50,000 will have to comply from 6 April 2027.
- Financial implications of Renters’ Rights Act from 1 May 2026
Some of the key considerations:
- Once the option of taking more than one month’s rent in advance is removed, some landlords will need to discuss alternatives with tenants – e.g. having a guarantor.
- As tenants in arrears are being given extra time before they can be evicted, you may need to increase your savings to ensure you can cover costs if there isn’t any rent coming in. If you don’t currently have rent guarantee insurance, please take a look at how we can help.
- With the various changes to processes and additional legal requirements, the cost of letting and managing agents’ services might increase slightly.
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Interest rates are expected to fall slightly
The Bank of England cut the base rate to 3.75% in December 2025, and most experts are predicting further reductions, forecasting it to reach 3.25% by the end of 2026.
When the base rate falls, mortgage interest rates tend to follow, so we’d recommend checking rates with a mortgage broker every three months or so, even if you are currently on a fixed rate.
To find out the latest rates and discuss your options, simply contact our partner at Embrace Financial Services.
- Invest in improvements ahead of upcoming changes in the law
With the recent announcement that all rental properties may need to achieve an EPC rating of C by 2030, alongside plans to introduce a new Decent Homes Standard under the Renters’ Rights Act, landlords may face some increased expenditure in the coming years to ensure their property can continue to be let legally and safely.
So, if the energy efficiency and overall condition of your rental could be improved, it’s worth starting to make some upgrades now – especially if you are buying a property to let or already have renovations planned. As the deadlines get closer, it may become harder to find good available contractors, and the cost of materials, etc., could rise. And remember that any investment in improvements should make your property more appealing to tenants and could also be reflected in the capital value, so it should be money well spent.
If you would like any advice about making improvements – including the kind of features and facilities that should attract and help retain the best tenants – the lettings team in your local branch will be very happy to help.
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The Your Move Content Marketing Team
