Landlord tax hikes stretching back to 2016 have reshaped the UK housing market, unlocking more than one million homes for first-time buyers.
According to a new study by the Joseph Rowntree Foundation, changes to mortgage interest relief and other tax reforms have reduced buy-to-let demand while boosting opportunities for residential buyers. While landlords argue that higher taxes squeeze tenants with rising rents, the study suggests the long-term effect has been to rebalance ownership across the housing market.
Tax Reforms Shift the Balance Towards Homeownership
Data shows that homeownership dropped to just 62% in 2016/17 as private renting peaked at 21%. Since then, owner-occupation has risen to over 64% — equivalent to 1.1 million more households than if pre-2016 trends had continued.
The reforms, introduced by successive governments, restricted tax reliefs and curbed speculative investment from landlords. While controversial among property investors, these changes were designed to reduce buy-to-let growth and give first-time buyers a stronger foothold in the market.
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Landlord Backlash and Rental Market Pressures
Unsurprisingly, landlord groups have resisted the measures, claiming that higher taxes have forced many investors out of the market. The National Residential Landlords Association (NRLA) argues that fewer landlords mean reduced rental supply and rising rents — with ONS data showing rents up 5.9% in the year to July 2025.
The report acknowledges these pressures but says they can be managed through targeted regulation, which should focus on affordability, housing quality, and long-term supply of new homes.
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