Income tax set to rise to up to 47% in 2027: Here’s how to take action before the end of the year

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Income tax set to rise to up to 47% in 2027: Here’s how to take action before the end of the year

With Christmas just around the corner, it’s understandable that many of us are ready to close up shop and leave today’s problems until the New Year.

But with just 2 weeks to go, and the news that there might be many more hits to landlords following the Renters’ Rights Act in May, there’s still plenty of time to act to make sure you’re all set to down tools knowing you did everything you could to get in the best position for the changes next year.

Why? As Adrian Moloney from The Intermediary reports, if you thought the Renters’ Rights Act was the last blow for landlords, enter income tax rises. “From April 2027, the property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%” he writes, “the impact of these increases, together with the changes enacted through the Renters’ Rights Act 2025, are on the back of previous increases in Stamp Duty and restriction of mortgage interest relief.

This could lead to further pressure on both existing and, potentially, new landlords.” The silver lining is that this early warning allows us to be fully prepared.

With thousands of landlords looking to sell before May 2026, and many considering downsizing to more manageable portfolio sizes, this is a clear signal that it’ll pay to act sooner rather than later if you’re thinking of selling.

So what can landlords do in the 2 weeks before Christmas? The simple answer is: get ahead of the curve and start your selling process now.

Landlord Sales Agency, known for being the top UK exit portfolio company is providing that exact solution.

No matter what property and what condition, we have a private database of over 30,000 buyers, the top property buying companies, private funds and first time buyers that we market your properties to, generate a bidding war that pushes your properties to the highest prices. What’s more, we manage the entire process for you.

This isn’t about selling before Christmas, it’s about getting your properties on the market now, so while you’re relaxing over the holidays, we’re doing the hard work to get your properties sold.

We have a 100% success rate in selling tenanted buy-to-let houses and a solid network of solicitors who can help with evictions, paying tenants to move out, or raising rents to make properties more appealing to buyers.

All our properties sell on average in just 28 days for up to 90% market value and for that we cover all the costs and take away all the hassle that comes with selling the portfolio. We’re also completely transparent, so you know exactly what we’re making.

With so many changes affecting landlords on the horizon, it pays to act fast.

Landlords who contact us today, can start the ball rolling, meaning come January you’ll already be ahead of the game when it comes to your properties being sold.

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Landlords face fines of £3,000 to £35,000 under new government guidance

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Landlords face fines of £3,000 to £35,000 under new government guidance

The government has released new civil penalty tables under the Renters’ Rights Act 2025, and the figures are outrageous. The official guidance, published this week on GOV.UK, sets out a scale of fines that start at £3,000 and climb to £35,000 for the most serious breaches. Many of these offences were previously treated as routine compliance matters. They now come with penalties that will feel closer to corporate regulation than traditional housing enforcement.

The largest penalties stand out immediately. A breach of a banning order carries a starting figure of £35,000. Using a possession ground that the landlord “knew or should have known” could not be met attracts a penalty of £30,000. Reletting a property during a no-let period is marked at £25,000. Even administrative failures, such as entering a selective licensing area without the correct licence, are set at £12,000.

These numbers land at a time when operating margins have already been eroded by increased regulatory overhead. The message is hard to miss. Compliance is no longer a procedural expectation, it is becoming a major financial risk factor. That change will shape the decisions of every landlord, whether they own one property or several hundred.

A comparison with other UK penalty regimes is also revealing. Many workplace safety offences attract lower penalties than the amounts now set for common licensing breaches. A failure to meet gas safety obligations in a rental property can trigger fines larger than penalties issued to companies that mishandle hazardous equipment. Even misleading rent advertisements carry a penalty of £4,000, which is more severe than fines issued for a range of trading offences in small businesses.

Landlords will question the fairness of these discrepancies. A documentary oversight or a misfiled possession claim may now result in a penalty that exceeds fines levied against regulated businesses in sectors with far higher operational risks. That tension will amplify political and industry debate, because the contrast is difficult to ignore once the figures are placed side by side.

Local authorities are likely to respond quickly. The guidance allows councils to retain revenue from civil penalties to support further enforcement activity. This creates a self-funding model that did not exist with the same clarity before. Enforcement teams that once struggled with budget constraints may now be encouraged to act more frequently and more assertively. Councils will focus on licensing, documentation, advertising and property condition, because these areas now offer significant financial return.

Lenders will take notice as well. A single penalty of £20,000 or more can alter the affordability profile of a portfolio. Breaches involving possession grounds will catch particular attention, because lenders rely on orderly tenancies to control arrears risk. Insurers will likely tighten underwriting for landlords who self-manage or operate in older properties, especially where documentation or licensing may be inconsistent.

Letting agents will face new pressures. The guidance implies shared responsibility in several areas, and agents who manage documentation or advertising on behalf of landlords could be scrutinised more closely. This will push agencies to adopt stricter internal controls, which may in turn increase costs for landlords who rely on full management services.

Tenants will experience the changes too. Councils will intervene earlier in disputes. Penalties allow enforcement without court delays, which means issues around licensing or documentation are likely to escalate more quickly than before. Some tenants will welcome the added oversight. Others may find that the heightened rules lead landlords to withdraw from riskier areas of the market.

Professional advisers will warn landlords to treat possession decisions with far more caution. The £30,000 penalty for relying on the wrong ground introduces a subjective test that invites argument over what a landlord “should have known”. That point alone will generate litigation, appeals and case law in the years ahead.

The guidance signals a tougher era. It reflects a political intention to make enforcement more visible and more costly. For landlords, it introduces a level of regulatory exposure that feels disproportionate when placed alongside penalties used in other sectors.

This is the landscape now set before the private rented sector. Success will belong to those who tighten their compliance processes, document every decision and treat governance as a central part of property management. The figures published this week send a clear warning. Mistakes will carry serious consequences, and the financial risks of non-compliance have never been higher.

Housing Act 1988 breaches and offences

Housing Act 2004 Offences

No starting point for civil penalties for breaches of licensing conditions under sections 72(3) and 95(2) of the Housing Act 2004 are set out in this guidance, as those conditions may vary substantially between local authorities. Local housing authorities will need to determine and publish their own starting levels for civil penalties for these offences.

Housing and Planning Act 2016 Offences

Renters’ Rights Act 2025 Breaches

Source data:

https://www.gov.uk/government/publications/civil-penalties-under-the-renters-rights-act-2025-and-other-housing-legislation/civil-penalties-under-the-renters-rights-act-2025-and-other-housing-legislation

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Deposit disputes remain rare despite rising rents – TDS

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Deposit disputes remain rare despite rising rents – TDS

Formal disputes over tenancy deposits continue to affect only a small fraction of the private rented sector, even as deposit values and rents climb, the TDS Group has revealed.

Its Statistical Briefing 2025 shows that just 1% of protected deposits in England and Wales were subject to formal adjudication during 2024/25.

A total of 46,950 cases were handled, up slightly from 0.91% the previous year but in line with a long-running pattern of disputes accounting for around one in every hundred tenancies.

Cleaning remains the most frequent trigger for disagreements, featuring in 54% of cases.

Damage followed closely at 49%, with redecoration the cause in 31%, while gardening accounted for 14% of disputes and rent arrears appeared in 10%.

99% of tenancies don’t end in dispute

Steve Harriott, the chief executive of TDS Group, said: “As rents and deposits continue to rise, the role of fair and transparent deposit protection has never been more important.

“It is encouraging that more than 99% of tenancies still end without a formal dispute, demonstrating the professionalism of agents and the cooperation of tenants across the sector.

“Where disputes do arise, our free, impartial adjudication service ensures that issues can be resolved quickly and fairly, without the need for court involvement.”

He added: “The findings also remind us that cleaning and damage remain the main sources of disagreement at the end of a tenancy, reinforcing the importance of detailed inventories and clear expectations from the outset.”

Protected deposits

The number of protected deposits in England and Wales rose to 4,706,470, while their combined value increased by about 6% to £5.53 billion.

Average deposits reached £1,175, the highest level recorded, reflecting annual rent rises of 7.9% in England and 8.8% in Wales to March 2025.

Custodial schemes now hold the majority of deposits by volume in England and Wales, representing 54.41% of all protected sums.

Insurance-backed protection still accounts for a larger share by value at 54.65%.

More disputes in Scotland

Scotland continues to record a higher dispute rate than elsewhere in the UK and during 2024/25, 5,951 disputes were raised, equivalent to 2.44% of protected deposits.

Although the total number of protected deposits slipped slightly to 243,283, their overall value increased to £215.5 million.

Cleaning was also the main issue in 58% of Scottish disputes, damage in 39% and redecoration in 25%.

Private rents north of the border rose by 5.7% over the year.

Lowest level of tenancy disputes

Northern Ireland again posted the lowest level of formal disagreement with only 358 disputes being recorded in 2024/25.

That represents 0.49% of protected deposits and marking a drop from the previous year.

The total number of protected deposits increased to 72,790, with an average value of £709.50.

Again, leaning and damage remained the most common causes.

The full Statistical Briefing 2025 is available to download for free from the TDS website.

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Government sets out rules for when tenants want to leave under the Renters’ Rights Act

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Government sets out rules for when tenants want to leave under the Renters’ Rights Act

The government has released guidance on how a landlord can end a tenancy if their tenant wants to leave.

Landlords should know they will not be able to give their tenants more than two months’ notice for a tenant to leave.

The new rules will come into effect on 1 May 2026 when the Renters’ Rights Act comes into force.

Tenant will need to pay rent during the notice period before the tenancy ends

According to the government guidance, landlords will be able to agree with their tenant to end the tenancy earlier or have a shorter notice period. This will need to be in writing.  The tenant will need to give their notice:

• so the tenancy ends on a day when the rent is due or the day before the rent is due
• in writing, for example, by letter, email or text

It’s important for landlords to know that under the new rules, the landlord cannot tell the tenant what method they must use to give their notice. The tenant is free to choose any written method, such as a letter, email, or text message.

The tenant will need to pay rent during the notice period before the tenancy ends.

The government guidance also says that if the tenant has already given notice but then changes their mind and wants to stay in the property, they can only stay if the landlord agrees to this in writing. If the landlord does not agree, the tenancy will end as planned.

Joint tenancies guidance

For joint tenancies, the government also gives guidance on what landlords should do.

According to the guidance, a tenant will be able to end the joint tenancy without the agreement of the other tenants.  If a joint tenant asks to give a shorter notice period, all the other joint tenants will need to agree to the shorter notice period.

If a joint tenant changes their mind and would like to stay, all the other joint tenants will also need to agree. If they do not agree, then the tenancy will need to end.

The guidance adds if some of the existing tenants want to stay, the landlord will be able to create and sign a new tenancy agreement.

Landlords will also be able to add new tenants to an existing tenancy agreement.

Property118 commercial reality check

Government rule changes often ignore the operational reality landlords face every day. The new notice requirements place yet another layer of responsibility on those already carrying the commercial risk. Serious landlords succeed by turning that pressure into structure, not stress.

What serious landlords should do next

Protect your position with clear written records. Tenants can now give notice by almost any written method, which increases the chance of ambiguity. Keep a disciplined record of every message and confirm key points back in writing to avoid misunderstandings.

Map out your tenancy timelines. Create a simple schedule of rent-due dates, expected notice windows and projected void risks. This restores predictability and helps you plan maintenance, cash flow and refinancing with confidence.

Set firm expectations for joint tenancies. Joint tenants can now terminate without unanimous agreement, which places extra risk on the landlord. Define your internal process for handling exits, replacements and new agreements to keep control of the transition.

Advantage through professionalism

Every new rule adds friction. Professionals respond by tightening process, sharpening documentation and protecting cash flow. That is how competent landlords stay resilient while others feel squeezed.

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Loan Covenants Explained – Avoiding Traps in Your Commercial Mortgage Agreement

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Loan Covenants Explained – Avoiding Traps in Your Commercial Mortgage Agreement

Loan covenants are one of the least understood parts of a commercial mortgage agreement. Many landlords focus on rate and loan size but overlook the conditions that govern how the facility must be managed. Breaching a covenant can trigger penalties, force refinancing, or even give the lender rights to call in the loan. Understanding covenants – and negotiating them carefully – is essential to protecting your portfolio.

What Are Loan Covenants?

A loan covenant is a condition in the loan agreement that requires the borrower to meet certain financial or operational obligations. They are designed to give lenders confidence that the loan remains sustainable throughout its term.

Covenants usually fall into two categories:

• Financial covenants – such as maintaining minimum interest cover, maximum loan-to-value ratios, or liquidity reserves.
• Non-financial covenants – such as restrictions on additional borrowing, reporting requirements, or obligations to maintain insurance and property condition.

Common Covenant Traps

• Unrealistic interest cover ratios – set at levels that are difficult to maintain if interest rates rise or rents fall.
• Rigid loan-to-value triggers – which may require capital injection if property values dip, even temporarily.
• Restrictive reporting – quarterly reporting requirements that create administrative burden without adding real value.
• Limitations on flexibility – such as prohibitions on refinancing or selling properties within the portfolio without lender consent.

Why Lenders Use Them

Covenants exist to protect lenders, ensuring early warning signs are spotted before defaults occur. However, poorly negotiated covenants can unfairly restrict landlords, reduce flexibility, and increase financial risk unnecessarily.

Practical Examples

• A landlord agrees to a covenant requiring a minimum 150% interest cover. When interest rates rise, they fall into technical breach despite continuing to meet monthly payments.
• A portfolio owner accepts an LTV covenant at 65%. A temporary fall in valuation forces them to inject cash or refinance, even though rental income remains stable.
• An HMO operator faces delays expanding their business because the facility prohibits further borrowing without lender approval.

How to Negotiate Better Terms

Covenants are not set in stone. With professional guidance, landlords can often negotiate:

• More realistic interest cover ratios, aligned with actual portfolio performance.
• Higher LTV thresholds or flexibility during valuation downturns.
• Annual rather than quarterly reporting to reduce administrative load.
• Clear carve-outs for routine refinancing or disposals.

The Role of NACFB Brokers

NACFB brokers ensure covenants are commercially workable. They know which lenders are flexible, how to present a case for more realistic terms, and how to protect landlords from traps hidden in the small print. Their oversight ensures that finance supports growth rather than restricting it.

Conclusion and Takeaway

Loan covenants are just as important as rates and terms in a commercial mortgage agreement. Landlords who understand and negotiate them properly avoid unnecessary risks and protect their flexibility. With the right broker, covenants can be structured to balance lender security with landlord freedom.

Next Steps

If you would like an NACFB broker to review or negotiate covenant terms on your next finance deal, please complete the short form below and a consultant will be in touch.

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Published: 10 December 2025

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Poor tenants shut out of social housing on affordability grounds

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Poor tenants shut out of social housing on affordability grounds

Tenants on the lowest incomes are being blocked from social housing because providers fear they will not be able to afford the rent, research reveals.

A study by homelessness charity Crisis shows housing associations in England are increasingly rejecting applicants following affordability checks carried out before a tenancy begins.

Around a third of English housing associations taking part said those checks frequently uncovered information that led them to conclude an offer was unsuitable.

Almost a quarter said households earning below certain thresholds were at times excluded entirely from housing registers.

That means some poorer applicants never reach the point of being considered for a social home, not because of behaviour or need, but over income issues to sustain a tenancy.

Where will tenants go?

The charity’s chief executive, Matt Downie, said: “Working with people who use our services, we know that people can be excluded from accessing a social home because their incomes are too low to meet the necessary criteria.

“The fundamental aim of social housing is to provide a safe and stable home for people on the lowest incomes.

“If people cannot afford social housing, where do they go?”

He added: “The reckless depletion of our social housing stock, alongside cuts to state support, has put English housing associations into an impossible position where they are forced to refuse access to people in precarious, vulnerable situations.

“Homelessness is surpassing record levels. Its costs to people, communities and local authorities are untenable.”

Change in allocation handling

Nearly three quarters of associations, accounting for 90% of the homes in the sample, said recent changes to benefits had altered how allocations and lettings are handled.

Limits on housing benefit and the benefit cap have pushed providers to scrutinise affordability more closely.

At the same time, associations reported a growing concentration of applicants with complex support needs.

As a result, unless someone faced acute circumstances such as severe ill health or domestic abuse, access to a social tenancy was described as unlikely or subject to long delays.

Even for households that do secure a property, there were fears that inadequate support beyond housing could make keeping the tenancy far harder.

Unsuitable tenants

One in four English housing associations said they often turned down nominations from councils because the proposed let was judged unsuitable.

Some cited the need for costly adaptations or the absence of specialist support as reasons for prioritising certain tenants.

Applicants with a history of anti-social behaviour faced the greatest exclusion.

Three quarters of associations said registers would sometimes or always shut out such households where no support package existed.

Still, more than half said exclusions could apply even when assistance was in place.

How houses are used

Researchers from Heriot-Watt University and the UK Collaborative Centre for Housing Evidence say that housing associations compared the task of allocating scarce properties to rearranging the deckchairs on the Titanic.

Almost three quarters operating choice-based lettings said the homes available bore little relation to the needs presented, with some doubting any system could prioritise demand given the numbers involved.

Rising repair costs and tighter building standards were also flagged as pressures limiting new development.

Crisis is urging ministers to overhaul how existing stock is used, pointing to Scotland where refusals on suitability grounds are far rarer.

While a quarter of English associations reported frequently rejecting council nominations, just 6% of Scottish providers said the same.

More than half of new social lets north of the border go to homeless households, compared with just over a quarter in England.

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Section 162 incorporation relief in crisis

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Section 162 incorporation relief in crisis

Securing clarity and stability in the application Section 162 incorporation relief for property investment businesses: Why the industry needs updated guidance and consistent interpretation.

Over the past decade, UK landlords and their advisers have faced growing uncertainty in how Section 162 incorporation relief is interpreted and administered. What was once a relatively stable area of tax law has become increasingly unpredictable, with significant impacts on landlords, advisers, lenders and the wider private rented sector.

This statement highlights several systemic issues that have emerged. It is not about any individual case or taxpayer. It is about the need for clarity, transparency and modernised guidance so that the industry can operate confidently and fairly under a consistent and consistent set of rules.

Withdrawal of pre-transaction clearance without replacement

Until 2016, advisers could request non-statutory clearance on factual matters relevant to incorporation relief. When this route was withdrawn without public consultation, and without any replacement mechanism, taxpayers lost the only formal way to obtain certainty on issues such as:

• business status,
• the treatment of liabilities,
• beneficial ownership on transfer, and
• the interaction with commercial refinancing requirements.

For a tax relief that is automatic rather than elective, the absence of any pre-transaction certainty mechanism has created deep structural vulnerability. Incorporation activity increased significantly after Section 24, yet the system designed to support certainty effectively contracted.

The gap between published guidance and operational practice

In recent years, practitioners have encountered situations in which HMRC’s operational stance differs from what is stated in published manuals and long-established professional commentary. Several examples illustrate this widening gap.

Example A — Beneficial interest transfers and Section 162

Professionals have reported receiving indications from HMRC that transferring the beneficial interest in property does not qualify for incorporation relief, even when the entire business is transferred as a going concern and where economic ownership passes to the acquiring company before legal title is updated during refinancing.

This position is not reflected in legislation, case law, or HMRC’s published manuals, which historically recognise the distinction between beneficial ownership and legal title. Without clear guidance, advisers cannot be certain how HMRC expects incorporations to be documented in real-world lending environments.

Example B — FOI evidence of agreed HMRC manual updates that remain unpublished

A recent Freedom of Information response confirmed that HMRC has internally agreed significant updates to its manuals relating to incorporation relief. These updates include a replacement version of CG65745, which has not yet been published despite many months having passed since internal approval.

Example C — Indemnities for ‘taken-over’ liabilities.

HMRC officers have, in some enquiries, indicated that indemnities for liabilities “taken over” by a company on incorporation are unacceptable.

This appears difficult to reconcile with HMRC’s own published manuals, including both the existing published guidance and the new unpublished version connected to ESC D32, which explains that indemnities are “normally” the accepted commercial mechanism where liabilities are transferred economically at incorporation, i.e. before legal transfers and refinancing is complete.

Long-established commercial practice and HMRC’s own manuals align on this point; recent operational positions do not, creating considerable uncertainty for taxpayers and advisers.

Example D — Disparity between HMRC manuals and Simon’s Taxes commentary

The leading professional commentary, Simon’s Taxes (notably B9:112 and B9:114), provides long-standing guidance on:

• the conditions for incorporation relief,
• the treatment of liabilities,
• the role of indemnities

Historically, HMRC’s published manuals aligned closely with this commentary. Yet practitioners have encountered interpretations that diverge significantly, suggesting, for example, that economic ownership cannot transfer without simultaneous legal title transfer.

Example E – New financing at incorporation

A further HMRC viewpoint, expressed in at least one formal explanation of its technical position, stated that where a company raises new borrowing at the point of incorporation and uses that borrowing to repay the proprietor’s existing mortgages, part of the consideration may be treated as cash provided by the company. This reduces the extent to which the transfer is regarded as being in exchange for shares and therefore may restrict the amount of gain eligible for rollover under Section 162.

This does align with the warnings in Simon’s Taxes at B9:114, however, many advisers and taxpayers have long understood that ESC D32 existed to prevent “dry tax” where liabilities were economically transferred to the company as part of a genuine business incorporation.

The unpublished version of CG65745 continues to leave room for ambiguity on this point.

Example F – Capital account withdrawals: Simon’s Taxes and BIM45700 vs operational stance

Impact across the sector

• timely publication of agreed manual updates,
• transparent communication where HMRC’s interpretation has developed, and
• alignment between published guidance and operational enforcement.

• Landlords face uncertainty over past and future incorporations.
• Advisers face heightened professional-risk exposure when guidance lags behind operational interpretation.
• Lenders encounter delays and documentation challenges, complicating refinancing and reducing liquidity.
• The wider private rented sector suffers from reduced confidence at a time of already significant regulatory pressure.

Uncertainty on this scale can distort decision-making and undermine fair administration.

What the industry needs

To restore clarity and stability, the sector urgently requires:

a. Updated and published guidance

Reflecting modern business practices, lending constraints, refinancing cycles and beneficial ownership mechanics.

b. A clear route to pre-transaction certainty

Whether statutory or administrative, the current void is unsustainable.

c. Prospective, not retrospective, application of new interpretations

Where HMRC’s understanding develops, it must be applied to future transactions, not retrospectively.

d. Alignment between manuals, professional commentary and operational practice

Taxpayers should be able to rely on published guidance when structuring legitimate commercial transactions.

A constructive way forward

The purpose of this statement is to highlight systemic issues and encourage constructive dialogue between:

• HMRC,
• professional bodies,
• technical practitioners,
• lenders, and
• policymakers

Thousands of landlords have incorporated their businesses in good faith, based on the published guidance and professional understanding available at the time. They deserve clarity, consistency and fair treatment. A stable framework benefits everyone.

Supporting evidence

Simon’s Taxes B9:112 – LINK

Simon’s Taxes B9:114 – LINK

HMRC FOI response – LINK

Current CG65745 manual including ESC D32 as of 05/12/2025 – LINK

BIM45700 – LINK

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Subsidence and ground movement – What landlords need to know

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Subsidence and ground movement – What landlords need to know

Subsidence is one of the most disruptive and time-consuming perils a landlord can face. Unlike a burst pipe or storm damage, ground movement claims rarely resolve quickly. Investigations, monitoring and structural works can span many months, sometimes years, with cash flow consequences if the property is uninhabitable. This guide explains causes, warning signs, how insurers assess claims, and the steps landlords can take to protect their position.

What Counts as Subsidence, Heave and Landslip?

• Subsidence – downward movement of the ground supporting a building, often due to clay shrinkage in dry spells, tree root desiccation, or washing-out of fines from leaking drains.
• Heave – upward movement of the ground, commonly when trees are removed and clay rehydrates.
• Landslip – movement of soil or rock down a slope. Coastal and hillside properties are more exposed.

Policies that cover “subsidence, heave and landslip” usually treat them together under the buildings section, often with a higher subsidence excess (for example £1,000).

Common Causes in Rental Stock

• Clay soils shrinking in hot, dry summers and re-swelling in winter.
• Trees and large shrubs close to foundations (willow, poplar, oak are frequent offenders).
• Defective drains eroding or softening bearing strata beneath foundations.
• Historic ground conditions, made ground, or nearby excavations and soakaways.

Warning Signs Tenants and Agents May Spot

• Stepped cracking through brickwork or at window/door corners (typically 3mm+ and tapering).
• Doors and windows sticking; new gaps at skirtings, coving or between extensions and the main house.
• Rippling or cracking where different building sections meet, especially after a dry summer.

Ask tenants to report changes promptly. Early notification helps limit damage and speeds insurer engagement.

How Insurers Assess Subsidence Claims

Expect a structured process:

1. Initial triage – desktop review and request for photos, tenancy details and history.
2. Engineer appointment – insurer’s consultant undertakes site inspection. Drain CCTV surveys are common.
3. Monitoring – crack gauges or precise level monitoring over one or more seasons to confirm progressive movement.
4. Cause and remedy – tree management (pruning/removal), drain repair, localised or full underpinning if required.
5. Making good – repairs to finishes, doors, windows and services; decorations at the end.

Because movement is seasonal, monitoring can take 6–12 months or longer. Set realistic expectations with tenants and lenders early.

What’s Usually Covered (and What Isn’t)

• Covered – repair of insured damage to the building caused by subsidence/heave/landslip; necessary investigations; reinstatement after stabilisation.
• Often excluded – patios, drives, boundary walls and fences unless the main home is damaged; poor workmanship/defective design; general settlement or bedding-in of new extensions.
• Contents – structural movement rarely triggers contents cover except for resultant damage (for example a cracked landlord-owned hob if the worktop distorts).

Loss of Rent – Set Adequate Time Limits

Properties are not always uninhabitable during monitoring, but significant works (underpinning, piled beams, major drain excavations) can require decanting tenants. Ensure your policy has realistic loss-of-rent limits by both sum and duration. For complex cases, 12 months may be insufficient; some insurers offer 18–24 months for larger risks.

Evidence Pack That Speeds Acceptance

• Date-stamped photos showing crack patterns and progression.
• Drain CCTV reports and plans (if available).
• Tree report listing species, age, distance from foundations and recommended management.
• History of extensions, prior movement or past underpinning (full disclosure is essential).
• Tenancy details and access arrangements for surveys and works.

Trees: Prune, Pollard or Remove?

Insurers often start with arboricultural management. Pruning or pollarding can reduce moisture demand, but sometimes removal is required. Beware unintended heave after removing large water-demanding trees on clay. Engineer and arborist advice should be coordinated and recorded.

Underpinning and Post-Claim Realities

• Underpinning is a last resort. Localised solutions (drains, trees) are preferred where effective.
• After underpinning, future insurance placement may require full disclosure and evidence of completion; some markets rate properties with prior movement differently.
• Keep a complete claim dossier (engineer’s reports, monitoring results, method statements, completion certificates) for renewals and any future sale.

Common Pitfalls That Derail Claims

• Late notification – delaying contact with the insurer can prejudice investigations.
• Non-disclosure – failing to mention historic movement, underpinning or previous tree issues.
• Unauthorised works – removing trees or starting structural repairs before insurer approval.
• Assuming “settlement” is covered – normal settlement, shrinkage or thermal movement is typically excluded.

Prevention and Risk Reduction

• Survey soil type and nearby trees when purchasing; adjust planting and maintenance plans for clay sites.
• Undertake drain surveys after major leaks or ground soft spots; repair promptly.
• Control vegetation near foundations; follow arborist schedules.
• Log inspections with photos; act early on cracks that open/close seasonally or exceed ~3mm.

Final Thoughts

Subsidence claims demand patience, documentation and coordination between landlord, tenants, engineers and the insurer. With early notification, clear evidence and realistic loss-of-rent limits, most cases resolve satisfactorily. Treat trees, drains and disclosure as part of your risk management, and keep a complete paper trail from first crack to completion certificate.

Request your quote or call-back

The most efficient way to get a personal quote with the best price and cover possible is to call the team on 01832 770965 so we can focus on your enquiry when you are ready and sitting down with your portfolio details to hand.

Alternatively, you can use the form below to request one of our team to give you a call back.

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Publication date: Tuesday 9 December 2025

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Hamptons forecasts modest 2026 house price growth

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Hamptons forecasts modest 2026 house price growth

House prices are set to rise modestly next year by 2.5% across Great Britain in Q4 2026, Hamptons says.

It is also predicting that inflation will ease, and mortgage rates will be lower.

The firm says transactions should hold near 1.15 million as improving affordability counters economic and tax pressures.

However, the outlook becomes more fragile from 2027 when Hamptons thinks political uncertainty and higher borrowing costs will slow growth to 2% in Q4 2027 and 1.5% in 2028.

Modest house price rises

Aneisha Beveridge, the firm’s head of research, said: “The housing market has always mirrored the mood of the nation.

“While the headlines have been dominated by uncertainty, underneath it all, we’ve seen signs of resilience.

“Inflation is easing, mortgage rates are falling, and affordability is improving, which should support modest price growth next year.”

She added: “But it’s hard to ignore the growing drag of taxation and politics.

“London, which historically leads recoveries, is being held back by higher stamp duty and broader tax anxieties, locking some owners into their homes and others out of buying them.”

Base rate cuts predicted

Hamptons says that since prices hit their post-crash floor in 2009, the Midlands is on track to outperform London by next year.

The North West and West Midlands are also expected to pass the capital by the end of 2027.

Next year, the agency believes inflation will fall faster than expected, allowing two or three base rate cuts.

By the end of 2026, Hamptons expects the Bank Rate to settle around 3.25%, with typical mortgage deals stabilising near 4%.

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Portugal cuts rental tax to 10%: A warning shot for the UK?

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Portugal cuts rental tax to 10%: A warning shot for the UK?

Recent announcements from the Portuguese Government, including a proposed reduction of income tax on residential rental income to 10% or even 0% in some cases, have captured the attention of UK landlords. The move contrasts strongly with UK policy direction and raises two important questions:

1. Is Portugal positioning itself as a more attractive reinvestment destination for UK landlords?
2. Does the UK Government risk being forced into similar reforms if rental supply continues to fall?

This article explores these issues from a landlord-focused, strategic perspective.

Portugal Is Actively Encouraging Landlords

Portugal has made a decisive shift towards using incentives rather than penalties to shape its rental market. Key measures include:

• A proposed 10% tax rate for residential rental income within a defined moderate rent bracket up to €2,300 per month
• A 0% tax rate for rents at least 20% below local medians
• Existing reduced rates of 10% for 10 to 20 year leases and 5% for leases over 20 years
• Reduced taxable bases for company structures

It is a clear strategic signal. Portugal wants to increase rental supply, encourage affordability, and reward landlords who commit to long-term or moderate-rent housing.

This approach is in stark contrast to the UK’s direction over the past decade.

Why UK Landlords Are Taking Notice

UK investors face a combination of rising costs and increasing penalties:

• Section 24 mortgage interest restrictions
• Income tax rates of 20 to 45% on rental profits
• An additional 2% tax increase on landlords was announced in the recent Budget
• Higher financing costs, with the UK base rate almost double that of the EU
• Growing regulatory burdens
• Persistent shortages in rental stock due to sustained landlord exits

Meanwhile, Portugal benefits from:

• A significantly lower tax burden on rental income
• A lower interest rate environment
• A government that openly acknowledges the role of landlords in solving housing supply issues

A portfolio generating rental profits taxed at 10% instead of 40% can dramatically improve net outcomes. When combined with lower borrowing costs, it is easy to see why some UK landlords are exploring overseas reinvestment, with Portugal now high on the list.

Could Portugal Be a Better Reinvestment Choice for Some UK Landlords?

For many landlord profiles, the answer is increasingly yes.

Portugal may be attractive to those who:

• Are exiting the UK market because Section 24 makes leveraged buy-to-let unviable
• Prefer stable, long-term rental yields
• Value predictable taxation and low operating burdens
• Want exposure to growing European rental markets
• Are comfortable investing internationally using appropriate legal and tax structures

Not every investor will be suited to the Portuguese market, but its direction of travel is hard to ignore. Portugal is becoming more landlord-friendly at the same time the UK is becoming less so.

Will the UK Need to Introduce Similar Incentives?

The UK Government may eventually have no choice.

The UK rental sector is under significant pressure:

• Tenant demand is rising
• Supply is shrinking
• Rents are increasing at record rates in many regions
• Councils are struggling with housing obligations
• Homelessness pressures are increasing
• Most commentators attribute at least part of the supply decline to taxation and regulation

If supply continues falling, the Government may need to consider reforms such as:

• Revisiting or reversing Section 24
• Offering lower tax rates for long-term tenancies
• Encouraging affordable or moderate rents through tax incentives
• Introducing measures to support reinvestment into the rental sector

Portugal’s approach demonstrates that a government can stimulate rental supply by rewarding landlords rather than penalising them. If the UK continues to push landlords out of the market, similar corrective measures may eventually become unavoidable.

A Strategic Turning Point

Portugal’s rental tax reforms serve both as an invitation and a warning.

For UK landlords looking for stable returns, lower taxation, and a supportive policy environment, Portugal is becoming a credible reinvestment destination.

For UK policymakers, Portugal’s shift highlights how far the UK has diverged from landlord-friendly policy and how unsustainable that may be if rental supply continues to shrink.

If the UK wants a functional rental market, it may ultimately need to pivot towards incentivising landlords, not deterring them.

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