UK Rental Market: September 2025—Tax Overhauls, NI on Rental Income & the Renters’ Rights Bill

This month has brought a lot of buzz in the property world from talk of major tax reforms to key updates on the Renters’ Rights Bill that could shape how we let and manage homes across the UK.

At Kings Estates, our priority is supporting landlords like you through market changes, helping you stay ahead and make informed decisions about your portfolio. But before we dive into what’s coming, here’s a quick snapshot of how the rental market performed last month.

English Rental Market Performance – August 2025

Rental activity softened slightly in August, though the overall picture remains steady.

Government Leaks Suggest Major Stamp Duty Overhaul

There are multiple reports that the government is exploring a significant shake-up of property taxes, including the potential replacement of Stamp Duty with a new property levy, as well as possible reforms to capital gains rules. 

• Abolishing Stamp Duty Land Tax on homes sold under £500,000
• Introducing a new national property tax on more expensive homes
• Replacing Council Tax with a local property levy in the future

While no policy is final yet, it’s wise for landlords and investors to track developments and consider how such changes could affect your long-term strategy.

For landlords operating in the buy-to-let market, these potential changes may present an opportunity, particularly if you are considering expanding your portfolio. However, it is important to note that while upfront costs could decrease, the proposed reforms would not remove property taxation entirely but rather alter its structure. We recommend monitoring future government announcements closely before making any investment decisions and seeking independent legal or financial advice where appropriate.

Could Rental Income Be Taxed Like Wages?

According to reports from The Times, the Treasury is reportedly reviewing plans to apply National Insurance contributions to rental income a move that could potentially generate an estimated £2 billion a year.

At present, rental income is exempt from National Insurance contributions, but this may change under proposed tax reforms by the Labour Party. No official policy has yet been confirmed.

What this could mean:

• An 8% national insurance levy may be applied to rental profits
• This would mirror the national insurance rate on employee earnings
• It would apply on top of existing income tax

If introduced, such a change could have a significant impact on net rental yields, particularly for landlords with highly leveraged portfolios or those in higher tax brackets. While these proposals have not been officially confirmed, they suggest a possible shift in the taxation of rental income. We will continue to monitor developments closely and keep you informed of any official updates.

Renters’ Rights Bill Nears Final Approval

The long-awaited Renters’ Rights Bill is progressing through the legislative process. It may receive Royal Assent sometime after 14th October 2025, with the bill expected to come into effect by early 2026. However, no exact dates have been confirmed, and there remains the possibility of further amendments or delays if disagreements arise.

What landlords should expect:

• Abolition of fixed-term tenancies, replaced by rolling periodic tenancies 
• Proposed new rules regarding rent increases, notice periods, and tenant rights
• The anticipated end of Section 21 ‘no-fault’ evictions
• Strengthened tenant protections
• New obligations for landlords and agents

If you manage your own tenancies or use a Let Only service, this is the time to review your tenancy agreements, understand your upcoming responsibilities, and ensure your documentation is ready for 2026.

At Kings Estates, we provide landlords with the insight and guidance they need to navigate change with confidence. From portfolio strategy to legal compliance, we’re your partner in property. Contact our team today to find out how we can support you.