Welcome to our monthly newsletter for property landlords. We hope you find this update helpful. If you would like to discuss any of the topics covered, please do not hesitate to get in touch.
Spring Forecast
During a week largely dominated by news of the conflict in the Middle East, Chancellor Rachel Reeves delivered the Spring Forecast to Parliament on 3 March 2026. Addressing MPs, the Chancellor said the government had “restored economic stability” as she presented the latest economic projections from the Office for Budget Responsibility (OBR).
The Chancellor emphasised the government’s focus on economic growth, particularly when considering Gross Domestic Product (GDP) per person. However, the OBR’s report presents a more nuanced outlook and suggests that the fiscal environment heading into the next Budget will remain challenging.
In line with the government’s policy of holding one major fiscal event each year, the Spring Forecast introduced no new tax or spending measures. Nevertheless, the OBR’s projections offer some early indications of the pressures that may shape future fiscal decisions.
From a tax perspective, the report indicates that the overall tax burden is likely to increase over the remainder of the decade. Taxes as a share of GDP are forecast to reach 38.5% by 2030/31, representing a post-war high.
A significant driver of this increase is the continued freeze on income tax thresholds, which is expected to remain in place until April 2031. As wages rise, more individuals, including those receiving rental income, may gradually move into higher tax bands even where their financial circumstances have not materially changed.
The key takeaway from the OBR’s report is that proactive tax planning will become increasingly important. Capital taxes and property transactions are likely to remain firmly on the government’s radar. For property owners, this means paying closer attention to allowances, considering the timing of income and gains, and ensuring that available reliefs are fully utilised. Reviewing how property assets are structured within a family may also highlight straightforward planning opportunities that could help manage future tax liabilities.
Making Tax Digital for Income Tax – Time is ticking
We continue to work with many of our property clients as they prepare for Making Tax Digital (MTD) for income tax. This new regime for self-employed individuals and landlords will apply from April 2026 where business and or property income (total income before expenses) exceeds £50,000 per year.
Under the new rules, taxpayers will be required to maintain digital records and submit quarterly updates to HMRC. The first quarterly update will be due by 7 August 2026.
Last month, HMRC issued a press release confirming that around 860,000 individuals will be affected by these changes. HMRC is encouraging taxpayers to take action now and highlights the benefit of spreading tax compliance activity more evenly across the year.
If you are among those entering the new regime from April 2026, it is important to remember that the standard annual Self Assessment process will still apply for the 2025/26 tax year. This means that alongside submitting quarterly updates for the year ending 5 April 2027, your 2025/26 tax return will still need to be filed by 31 January 2027.
If we are not already helping you prepare for this transition, please do get in touch so we can support you in moving to the new digital system.
New rules on building products: What property owners need to know
The government has published a significant Construction Products Reform White Paper outlining plans to strengthen regulation of materials used within the building industry. The proposals are a direct response to the findings of the Grenfell Tower Inquiry.
A central element of the reforms is a requirement that all construction products must be properly assessed for safety before they can be used. A consultation process is currently underway, with secondary legislation expected later this year.
For property owners, particularly those who own or manage flats or residential buildings, this forms part of a wider shift in how building safety is being approached following Grenfell. The Building Safety Regulator, established after the tragedy, is already operational and enforcement activity has increased considerably.
Local regulators are issuing more formal notices and carrying out more inspections than in previous years, supported by additional government funding. Remediation work relating to unsafe cladding and other fire safety defects is also progressing, with work having started or been completed on more than 2,100 buildings.
The direction of travel is clear. Standards are rising, enforcement is increasing, and expectations on building owners and managers to ensure safety and compliance are becoming more stringent. If you own a leasehold flat or residential building and have not yet undertaken a fire safety or building safety assessment, it would be sensible to review your position as these reforms continue to develop.
See more here.
The rise of the older buyer and what it means for the market
One of the more notable developments in the UK housing market in recent years has been the growing presence of buyers in their fifties.
This is perhaps unsurprising when considered in context. Many individuals now in this age group first entered the housing market during the 1990s, when property prices were significantly lower than they are today.
After three decades of strong price growth, many now hold substantial equity in their homes, with mortgages either fully repaid or close to completion. As a result, their decision to move is often driven less by financial necessity and more by lifestyle considerations.
Common motivations include children leaving home, plans for early retirement, a desire to be closer to family, or simply the wish to move into a property better suited to the next stage of life.
For sellers, this can be encouraging. Buyers with significant equity tend to offer a smoother transaction process. They are often less reliant on long property chains, may be able to move more quickly, and are generally less dependent on mortgage approvals at critical points in the transaction.
If you are considering selling, it may be worth recognising that this group of buyers often prioritises factors such as property quality, low maintenance requirements, good transport connections and proximity to amenities. Presenting a property with these features in mind, rather than focusing purely on size, may help attract the type of buyer who can deliver a quicker and more straightforward sale.
Renters’ Rights Act: Possible SDLT consequences for tenants
Many property owners are now familiar with the headline changes expected under the Renters’ Rights Act when it comes into force in England on 1 May 2026. However, there is a lesser-known implication for tenants relating to Stamp Duty Land Tax (SDLT).
SDLT does not apply solely to property purchases. It can also apply to leases based on the total rent payable over the duration of the lease.
Under the current system, this has rarely been an issue for residential tenants because most assured shorthold tenancies are relatively short and do not generate sufficient cumulative rent to exceed the £125,000 threshold at which SDLT becomes payable.
However, the Act will convert existing and new tenancies into periodic tenancies that continue indefinitely. From an SDLT perspective this creates a different outcome because the tax rules treat such arrangements as a single lease with a continuously extending term, meaning the cumulative rent effectively grows year by year.
For tenants paying typical rents, it may take more than a decade for the £125,000 threshold to be reached, and when it is the tax due is often relatively modest. Currently the tax is 1% of the amount above the threshold. However, tenants in London or other higher rent areas may reach that point sooner.
Once the threshold is exceeded, the tenant has just 14 days to submit an SDLT return and pay any tax due. In each subsequent year there is a further reporting obligation within 30 days of the tenancy anniversary.
These are tight deadlines and the penalties for missing them can exceed the tax payable. Many tenants will be unaware that this obligation exists.
Although this is not a direct liability for landlords, it is worth being aware of the issue as tenants are unlikely to receive proactive notification from HMRC.
