Spring Statement 2026 – key updates for landlords

The Chancellor Rachel Reeves delivered an update on the trajectory of the UK’s economy over next few years in her Spring Statement.

The Office for Budget Responsibility (OBR) released its forecast alongside the statement, which highlights some of the areas that could impact landlords in the coming years.

Find out how the latest financial update could impact the rental market in the short-and long-term.

The economic outlook

This Spring Statement has been referred to as more of a ‘Budget health check’ than a fiscal update. With no direct policy updates or changes to spending plans,the Spring Statement has mainly given insight into how the UK’s economy might perform in the coming years.

Estimates for economic growth, inflation, unemployment, government spending, and tax income for the next few years were released after the statement by the OBR.

Growth and employment rates, along with interest rates and inflation, are key measures for landlords to pay attention to.

In the Spring Statement, new growth forecasts were confirmed:

2026 growth – 1.1 per cent (down from 1.4 per cent in November growth forecast)
2027 growth – 1.6 per cent (up from 1.5 per cent in November growth forecast)
2028 growth – 1.6 per cent (up from 1.5 per cent in November growth forecast)
2029 growth – 1.5 per cent (the same as forecast in November)
2030 growth – 1.5 per cent

The OBR also shared their predictions for employment rates. This revealed they believed unemployment would rise more sharply than previously forecast, peaking at 5.3 per cent this year. But that this would gradually fall to 4.1 per cent by 2030.

Uncertainty around interest rates and inflation

The outlook around inflation and interest rates is much less certain – considering the forecasts from the OBR were made before the recent geopolitical tensions.

The OBR estimated that inflation would decrease more than previously forecast, falling to 2.3 per cent this year.

But recent events have already had a direct impact on domestic gas and oil prices. Some experts believe this unexpected spike in fuel costs could make an upcoming cut to interest rates much less likely.

How will this affect the rental market?

The housing and rental market are both exposed to changes in the UK’s economy. Sluggish economic growth typically leads to slower wage growth – which then has a knock on effect on rent affordability.

Landlords need to keep this in mind, especially as your own costs increase with the introduction of new legislation like the Renters’ Rights Act and Making Tax Digital. You may not be able to pass on your increased costs to your tenant as they might not be able to afford them.

Another consideration for landlords is that high unemployment can affect tenant demand and potentially increase the likelihood of tenants falling into rent arrears.

Finding the balance of affordability against managing the costs of owning a rental property will become even more important.

There could also be an impact on mortgages. Unpredictable inflation and interest rates could mean mortgage rates stay higher for longer – even though they were expected to fall throughout 2026.

The latest on income tax for landlords

After headline changes to income tax were announced in the Autumn Budget, some wondered if there would be further tweaks to how it’s rolled out.

However, the Spring Statement didn’t include any updates to these plans.

This means landlords should be prepared for the two per cent income tax rise coming in April 2027 to go ahead as planned – as well as the ‘stealth tax’ coming from income tax thresholds being frozen for the next five years.

The BBC has a calculator to help you work out how much the income tax threshold freeze could affect you.

Renters’ Rights Act less than two months away

The Spring Statement falls at a crunch time for landlords – less than two months before the start of the Renters’ Rights Act. So this was one of the last opportunities for guidance before the first measures of the Act are introduced.

The next update landlords can expect is when the government publishes its new information sheet this month. A document all landlords are required to provide a copy of to their tenants by 31 May 2026.