Budget 2026: What It Means for Landlords, First-Time Buyers and the Housing Market

Increased Tax Burden for Landlords

One of the most notable announcements was a further increase in property income tax from April 2027. Following an earlier rise already announced by the Government, landlords will now face an additional 2% increase, taking rates to:

• 24% for basic-rate taxpayers
• 44% for higher-rate taxpayers
• 49% for additional-rate taxpayers

For many landlords, this represents another challenge at a time when rising compliance costs, changing legislation and higher borrowing costs are already squeezing returns. Industry bodies have warned that increased taxation may discourage investment in the private rented sector and could contribute to further rent increases as landlords look to offset their growing costs. 

New Help for First-Time Buyers

The headline positive for buyers is the introduction of the new Your First Home scheme. Backed by £4.7 billion in government funding, the initiative will offer:

• A 20% equity loan
• Five years interest-free
• Deposits from as little as 2.5%
• Household income limits of £110,000 outside London

Applications are expected to open in early 2027, with the first loans available from April 2027. The scheme is designed to help more people onto the property ladder, particularly those struggling to save a larger deposit while paying rising rents. 

Alongside this, changes to Lifetime ISAs will make it less punitive for buyers purchasing above the current £450,000 threshold, while a new First Time Buyer ISA is scheduled to replace the Lifetime ISA for new savers from 2029. 

More Affordable Housing Investment

The Government also announced an additional £1.5 billion investment into affordable housing, supporting the delivery of approximately 10,000 new homes across England. Social rented housing is expected to be a particular focus, with local authorities receiving continued support for council housebuilding.

While increased housing delivery is welcome, many commentators believe that significantly more homes will be needed to address the long-term imbalance between housing supply and demand. 

Business Rates Relief Extended

Good news for many high street businesses comes in the form of extended business rates support. From April 2027, qualifying retail, hospitality and leisure properties will benefit from enhanced relief, helping to support town centres and local economies. 

Strong local high streets remain important for estate agents, lettings businesses and the wider property sector, helping maintain vibrant communities that attract both residents and investors. 

What Could This Mean for the Local Market?

For buyers, particularly first-time purchasers, the Budget provides additional opportunities to access homeownership through equity loans and enhanced savings support. This may increase demand at the lower and middle ends of the market over the coming years. 

For landlords, however, the outlook is more challenging. Additional taxation could encourage some investors to reassess their portfolios or leave the sector altogether. With rental demand continuing to outstrip supply in many parts of the country, including Oxfordshire and surrounding areas, any reduction in available rental homes may place further upward pressure on rents. 

The Office for Budget Responsibility predicts house prices will continue to grow modestly over the next few years, while mortgage rates are expected to remain higher than many borrowers became accustomed to during the last decade. 

Final Thoughts

Budget 2026 aims to balance support for first-time buyers with wider housing market reforms, but it is likely to generate mixed reactions across the property sector. While initiatives to help buyers are welcome, concerns remain that further tax increases on landlords could reduce investment in the private rented sector and potentially exacerbate the ongoing shortage of rental accommodation.

Whether you're considering your first purchase, expanding a property portfolio or reviewing your current housing plans, understanding how these changes affect your position will be key in the months ahead.

If you would like advice on buying, selling, letting or investing in property, our experienced team is here to help.