Landlords faced several challenges in recent years including a stamp duty increase on second homes from 3% to 5% and higher mortgage rates. Other regulatory changes have also impacted the buy-to-let market. Section 24 was introduced between 2017 and 2020 and means landlords now pay tax on their full rental income before finance costs are deducted. This has led to much higher tax bills for some landlords. House prices have stagnated which means smaller profits for landlords. This is particularly true for landlords in London where property prices have dropped in some areas.
More changes are coming in 2026 and beyond including
Making Tax Digital for Income Tax and the Renters’ Rights Act and a new Energy Performance Certificate regime. Landlords need to prepare for these changes. Tim Thomas works as a policy and campaigns officer at Propertymark which is a trade body for estate agents. He said the operational landscape for many landlords is evolving rapidly as we move through the year. For landlords it will represent some of the biggest changes in over 30 years and proactive planning is essential to ensure compliance with new rules. Here is what you need to know about the upcoming changes.
Making Tax Digital for Income Tax
Starts on 6 April 2026 Making Tax Digital for Income Tax begins on 6 April 2026 for landlords with annual rental incomes over £50,000. You will need to report your income and expenses to HMRC digitally every quarter. Landlords earning between £30,000 and £50,000 must do this from April 2027 while those with income between £20000 and £30,000 will follow the new rules from April 2028. More than 860,000 self-employed people and landlords will start reporting their income and expenses through the new digital process from April 2026. The change is part of the government’s efforts to modernise.
tax system and ensure taxpayer information
Thomas from Propertymark said this methodology will eventually replace traditional paper or online self-assessment returns and will be implemented for everyone in phases depending on turnover & as time goes on. Landlords need to make sure they comply with the new rules because penalties will apply to those who do not. A penalty point is issued for a late quarterly update or return and a £200 penalty is charged if you reach four points within two years. You will need to report your income and expenses through compatible software. HMRC has a software finder tool you can use to find suitable software.
Renters’ Rights Act starts on 1 May 2026
The Renters’ Rights Act is one of the Labour government’s major pieces of legislation but has faced criticism from landlords. It is still important to understand how it will affect you.
The Act passed in October 2026 with the first major reforms on evictions and tenancies taking effect on 1 May 2026.
From 1 May the following changes will begin: End of no-fault Section 21 evictions. Landlords in the private rented sector cannot evict tenants without a valid reason.
Fixed contracts abolished. All tenancies in the private rented sector will roll on from month to month or week to week depending on the arrangement you have with a tenant with no end date. Tenants can also end them with two months’ notice. New rental rules.
Landlords can only raise rent once a year while renters can challenge unjustified increases. No more bidding wars. Landlords must stick to no more than the advertised rent price. One month’s rent upfront maximum. Landlords cannot ask for more than one month’s rent upfront.
Refusing tenancy to those on benefits or with children abolished. It will be illegal to refuse tenants just because they receive benefits or have children. Pets policy. Renters can ask to live with a pet and requests cannot be unreasonably refused by landlords. Other aspects of the Renters’ Rights Act will begin from late 2026 including the introduction of a Private Landlord Ombudsman that renters can take complaints to.
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A Private Rented Sector Database
created so renters can check if you as a landlord are registered. After this Awaab’s Law will be applied to the private rented sector following a consultation. This law already applies to the social rented sector and makes it mandatory for landlords to address all emergency hazards like damp & mould. The National Residential Landlords Association is a trade association for landlords and has issued guidance on its website about what landlords can do ahead of the changes.
Renters’ Rights Act.
This includes inspecting your properties & addressing any potential hazards and doing checks on prospective tenants. they’veMake sure your letting agent is prepared for the changes if you use one. Following the new rules when they start is essential. If you fail to comply initially or make minor mistakes you could face a civil penalty of up to £7,000. Serious or repeated failures to follow the rules could result in a civil penalty of up to £40,000 or criminal prosecution.
New Energy Performance Certificate metrics – second half of 2027
All private rental properties must have an EPC rating of C or above by 2030 under the Minimum Energy Efficiency Standard. The current requirement is E. A new system called the Home Energy Model will require landlords to meet two out of three possible metrics to achieve the C rating instead of just one. Landlords must meet a fabric performance standard by installing measures such as loft insulation or cavity wall insulation or double glazing. They must then meet either a heating systems metric or a smart readiness metric.
The heating systems metric requires installing measures like heat pumps. The smart readiness metric involves getting solar panels installed. Reaching the new C standard could cost you thousands of pounds. The new metric system was supposed to launch in October 2026 but ministers have delayed it until the second half of 2027. What counts as an EPC rating of C now might be different in the future. If your rental property has an EPC of D or lower you should take action now to meet the current C rating.
This makes it more likely you will pass the new EPC ratings. You can boost your home’s EPC rating by adding insulation to your loft or cavity walls or upgrading to LED lighting throughout your home or installing a smart thermostat. The Boiler Upgrade Scheme offers grants of up to £7500 toward the cost and installation of a heat pump. The scheme has been extended to 2030. Thomas from Propertymark said that addressing these environmental improvements now is essential given the current shortage of skilled tradespeople and the high volume of properties requiring upgrades.
Minimum qualifications for letting agents – date to be confirmed
The government announced plans in 2026 to increase regulation among estate agents by introducing mandatory qualifications for letting agents. Ministers also proposed implementing a Code of Practice that sets out minimum standards for property agents including estate agents and letting agents & managing agents.
No date has been set for when these new rules will take effect. A consultation has closed and the government is considering next steps. Landlords who use letting agents should check that they hold correct qualifications before any changes come in. You may want to switch to a different company that is ready for the upcoming law changes if your current agent does not have the right qualifications.
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