Rachel Reeves announced a new 2% tax increase on landlords’ rental income in Wednesday’s Budget.

Responses from the survey conducted immediately after the Budget suggested that the tax rise will lead to difficulties for renters as landlords pass on the extra costs to their tenants or sell up altogether, cutting the supply of rental homes in the long term.

Some 86% of the 2,000 people polled in Together’s survey said the increased costs for landlords would simply lead to higher monthly payments for renters.

This rises to 94% of 61- to 79-year-olds surveyed.

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Ryan Etchells, CCO at Together (pictured above), said: “In our experience many of our landlord customers have chosen not to pass on increased costs to their tenants, instead absorbing extra payments associated with providing homes for tenants, which have been brought about by attacks on the private rental sector by successive governments.

“However, landlords with properties in their own names now face the taxman taking another sizeable bite out of their incomes thanks to Reeves’ rise in property income tax rates. The 2% hike will not only leave landlords out of pocket, but renters too. Our research shows that the public understand that the extra costs will fall to those renting their homes.

“With all the regulatory, legislative and tax burdens of late (on top of the incoming Renters Rights Bill) this will inevitably result in higher rents from next year onwards, and if landlords can’t make their portfolios work for them they could be forced to sell-up altogether.”

The 2% surcharge will be applied across the board, increasing property income tax to 22% for taxpayers on the basic rate, 42% on the higher rate and 47% for those paying the additional rate, to be introduced from April 2027.