Telegraph Money is launching a campaign ‘calling on the Government to end the war on property investors and put a stop to further meddling that risks driving decent landlords out of the market.’

The original article can be read here (subscription may be necessary) and in summary says that the UK’s rental market has faced significant challenges over the past decade due to increasing taxes, stricter regulations, and government policies that have diminished landlords’ profitability. Since 2015, when the Conservative government implemented measures like the 3% stamp duty surcharge and the gradual removal of mortgage interest tax relief, landlords’ profits have dwindled. For instance, a higher-rate taxpayer landlord in London would have seen a £2,200 profit on a £500,000 property in 2013, but in 2024, that same landlord faces a £1,300 loss despite similar mortgage rates.

These challenges have led many landlords to exit the market, with around 300,000 more properties being sold than purchased since 2016. This exodus has contributed to the current housing shortage and pushed rents to record highs, exacerbating affordability issues for tenants. The upcoming Renters’ Rights Bill, set to ban no-fault evictions (Section 21), and expected capital gains tax (CGT) increases could further accelerate landlords’ departure from the market, which might push rents even higher.

Labour’s potential CGT hike, rumored to be announced in the October 30 budget, is particularly worrying for landlords. It could align CGT rates with income tax rates, meaning landlords could face taxes as high as 45% on property sales profits. Many landlords are now rethinking their involvement in the rental sector, which could further reduce rental supply.

The cumulative impact of these tax changes, combined with rising running costs due to inflation and energy efficiency requirements, is creating an environment where small and medium-sized landlords are struggling to maintain profitability, leaving many with no choice but to sell.

The ongoing pressures on landlords and the resulting shrinkage of the rental market risk creating a market dominated by larger corporate landlords, which some fear could reduce competition and increase rents further .