The Spring Statement 2025, delivered by Chancellor Rachel Reeves on 26th March 2025, introduced no new tax rises but confirmed major spending cuts, economic adjustments, and updates on housing policy. These developments could have a significant impact on landlords and the rental market.
Our Landlord Insurance team have outlined the key details below.
Spending cuts & growth forecasts
The government announced substantial spending reductions, including:
- £5 billion in welfare cuts
- £6 billion reduction in international aid
- 15% cut in civil service running costs (saving £2 billion by 2030)
Meanwhile, the Office for Budget Responsibility (OBR) revised its economic growth forecasts, predicting a 1% growth rate in 2025, a significant drop from the previously expected 2%. However, a gradual improvement is anticipated, with growth rising to 1.9% in 2026, followed by 1.7% in both 2027 and 2028, before experiencing a slight increase to 1.8% in 2029.
These changes suggest a slower economic recovery, which may impact tenants’ financial stability and rental affordability.
Impact on the rental market
With slower economic growth and reduced government spending, landlords should be aware of potential shifts in the rental market:
- Rents may rise at a slower pace due to economic constraints
- Tenants may face increased financial pressure, particularly those relying on welfare support
- Rental yields could be affected, making financial planning and cost-saving measures essential
What’s happening with the Renters’ Rights Bill?
The Renters’ Rights Bill, aimed at reforming tenancy laws, has been delayed but remains a key issue. Proposals include:
- Banning Section 21 evictions
- Limiting rent increases
- Making it easier for tenants to keep pets
The Bill’s committee stage is set to begin on 22nd April 2025, but its implementation is now expected in late 2025 or early 2026.
Tax & Regulatory updates from the autumn budget
The 2024 Autumn Budget introduced several key tax changes impacting landlords:
- Stamp duty surcharge increase from 3% to 5% for landlords and second-home buyers
- Stamp duty threshold reduced to £125,000 from April 2025
- Income tax threshold freeze to end from 2028-29, potentially benefiting landlords in the long term
These changes could make property investment more costly, requiring landlords to reassess affordability before making new purchases.
Mortgage & Interest Rate considerations
Landlords with buy-to-let mortgages should take note of the following:
- Inflation remains at 2.8%
- Interest rates continue to sit above 4%
- The Bank of England held the base interest rate at 4.5% in March
There is speculation about potential rate cuts later in the year, but for now, landlords should prepare for sustained higher borrowing costs.
Housing policy & new developments
The government has set ambitious house building targets, aiming for 305,000 new homes per year—the highest level in 40 years. Key measures include:
- £2 billion investment in affordable and social housing (from 2026)
- The Planning and Infrastructure Bill to streamline development and increase housing supply
For landlords, increased housing supply could lead to a moderation in rental prices, affecting long-term returns.
This article is for informational purposes only and should not be considered legal advice.
About Lansdown Insurance Brokers
Lansdown Insurance Brokers are specialists in Landlord Insurance and HMO Landlord Insurance, helping property professionals navigate the complexities of insurance and risk management.
Whether you’re a landlord or a property manager, call the team on 01242 524498 or email enquiries@lansdowninsurance.com.
Lansdown is part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.