📢 What UK Landlords Need to Know: Renters Reform Bill + Property Wealth Tax Updates

With the political landscape shifting and new legislation being drafted, UK landlords are facing a wave of upcoming changes. In this post, we break down key updates on:

• 📜 The Renters Reform Bill

• 💰 Proposed Property Wealth Taxes

• 💸 Possible National Insurance on rental income

Whether you’re a seasoned investor or just starting out, these updates could reshape how you manage, buy, and profit from your properties.

🏛️ Property Wealth Taxes: What’s on the Table?

Despite promises to protect “working people” by not raising PAYE, VAT, or employee National Insurance, the current government is looking for new sources of tax revenue — and property ownership is firmly in the spotlight.

Two forms of property-related taxes already exist:

1.

Council Tax

Often overlooked, council tax is effectively a property wealth tax. The issue? It’s based on 1991 property valuations — meaning wealthy areas often pay proportionally less than lower-income regions.

Reform is being considered, particularly:

• Revaluing properties to reflect modern prices

• Charging a 0.5% wealth tax on homes in Bands G & H

• Allowing deferral until sale, with a 0.6% charge

2.

Annual Tax on Enveloped Dwellings (ATED)

Rarely encountered by smaller landlords, this tax affects:

• Properties worth over £500k

• Owned by companies

• Used for personal residence (not as a rental business)

💸 Could You Be Paying NI on Rental Income?

A bigger concern for small landlords is the potential addition of National Insurance contributions on rental income.

What we know:

• It’s likely to hit individual landlords, not limited companies

• It may be charged on gross revenue rather than profit — just like Section 24 changes

• It’s being seen as a “soft target” because it doesn’t stifle entrepreneurship or cause people to move abroad

👉 Why it matters:

The vast majority of UK landlords own just 1–2 properties. An NI charge on gross rent could significantly reduce their margins.

🧾 Council Tax Overhaul – The North Pays More

The current system:

• Based on 1991 valuations

• Often regressive — lower-value homes pay more relative to their value

• Unfairly penalises landlords and homeowners in the North

The proposed fix:

• Revalue all properties

• Band G–H owners pay a property wealth tax to the central government

• Excess revenue beyond the current council tax goes to Westminster

But the big issue is liquidity — pensioners or long-time homeowners may struggle to pay an annual 0.5% tax without selling or downsizing.

📜 Renters Reform Bill: Key Takeaways

The bill (still not yet passed, but heading for approval) includes:

✅ End of Section 21

No more “no-fault” evictions. Landlords must cite a reason (e.g. selling, arrears, breaches).

✅ Section 13 Rent Increases Now Challengeable

Tenants can challenge rent increases with the tribunal. If they do:

• The increase is paused

• It isn’t backdated

• It could be 6+ months before a decision is made

✅ Ban on Rental Bidding

Tenants can’t offer more than the asking rent. Expect lottery-like demand in high-rent areas.

✅ Tenants Can Serve Notice via Text

Notice periods from tenants will become more flexible — and easier to serve.

✅ Personal Guarantors Become Crucial

With more rights for tenants, guarantors are becoming the landlord’s best safety net.

✅ No More Mandatory Pet Insurance

Landlords can’t demand it — even if pets are allowed.

✅ Mandatory Landlord Database

All landlords (individual or corporate) will need to register, likely with details and certificates like gas safety and EICRs.

🚨 Ahab’s Law: Addressing Mould

Spurred by the tragic death of Awaab Ishak, this proposed law will:

• Require landlords to investigate hazard complaints (especially mould) within 10 days

• Apply across the PRS and social housing

• Come into effect by 2027

🧠 What Landlords Should Do Now

Here are a few steps to get ahead of the curve:

✅ Review your ownership structure

If you’re still operating in your personal name, consider switching to a limited company setup — especially if NI on rental income becomes law.

✅ Document rent increases carefully

Make sure your Section 13 notices are clear, justified, and well-documented to avoid disputes.

✅ Think long-term

With income tax, inheritance tax, and pension relief also under scrutiny, start thinking about long-term exit planning, reinvestment, and income diversification.

✅ Register early if the landlord database becomes live

It may also present new marketing opportunities.

📅 When Will This All Happen?

• Expected passage: Late 2024 or early 2025

• Activation: April 2026 (based on current projections)

• Budget announcements expected November 2024

🧭 Final Thoughts

The next 12–24 months could fundamentally reshape how landlords operate. But with change comes opportunity.

At Manchester Sourcing, we’re already helping clients:

• Navigate legislation changes

• Review their tax position

• Adjust strategies for long-term cash flow and compliance

📩 Want help reviewing your portfolio or buying strategy? Let’s chat.

Let me know if you’d like a short version to share on social media with a blog link.