Rents Are Rising Again — and Retired Homeowners Are Feeling the Pressure Too

Why rents are rising — and who bears the cost

The Chancellor's decision to raise income tax rates on rental income — from 20% to 22% at the basic rate, 40% to 42% at the higher rate, and 45% to 47% at the additional rate, effective from 2027 — has triggered an immediate reaction from landlords. An NRLA poll found that 65% of landlords planning rent increases cite these forthcoming tax changes as the primary reason.

The Office for Budget Responsibility has confirmed that these tax changes are expected to feed through into higher rents. The NRLA's own analysis puts the likely impact at £20–25 per month on a typical UK rental property — rising to more than £40 per month in London.

There is a further pressure: 33% of landlords surveyed intend to sell one or more of their properties in response to the tax changes. Fewer rental properties in the market means greater competition for those that remain, which pushes rents higher still. It is a dynamic the OBR has explicitly warned about.

The particular pressure on retired renters

Many older homeowners think of rising rents as someone else's problem. But the picture is more complicated than that. Some homeowners in their 60s and 70s are themselves renting — having downsized, moved for family reasons, or sold their home and not yet purchased again. Others are watching their children or grandchildren struggling under rising rental costs, often while trying to save for a deposit of their own.

Retired households are predominantly on fixed incomes: state pension, private pension, and savings interest. Unlike workers, they cannot benefit from salary increases that might otherwise keep pace with rising costs. When rents rise — or when children need financial help with rent — the pressure lands on household finances that have limited capacity to absorb it.

For homeowners who own their property outright or with significant equity, there is an alternative that many are not yet aware of: accessing that equity to supplement retirement income, without the need to sell.

How equity release can provide financial breathing room

A lifetime mortgage allows homeowners aged 55 and over to release a portion of their property's value as a tax-free lump sum or a drawdown facility. Because the release is a loan — secured against your home — the proceeds are not classified as income and are therefore not subject to income tax. Interest rolls up over time and the loan is repaid when the property is eventually sold.

This tax-free nature is significant for retired homeowners, for whom additional income can trigger higher tax on pension or savings income. Released equity does not carry that risk.

Common uses that are particularly relevant in the current environment include:

• Topping up pension income to cover rising household costs, including utilities, food, and care expenses
• Intergenerational gifting — helping children or grandchildren with rental deposits or moving costs. In 2025, 13% of equity release proceeds were used for exactly this purpose
• Home improvements that reduce ongoing costs — insulation, new boiler, energy efficiency upgrades — which accounted for 21% of equity release use in 2025
• Consolidating existing debts to reduce monthly financial commitments

The stability of owning versus the uncertainty of renting

There is a broader point worth making. Homeowners — even those who have released equity — benefit from a fundamental stability that renters do not. Your home cannot be repossessed simply because a landlord decides to sell. Your housing costs do not rise unpredictably because a government changes tax policy. The security of ownership, combined with the ability to access property wealth through equity release if needed, is a meaningful advantage in an uncertain environment.

Typical lifetime mortgage rates currently sit in the 6–7% range, and some products are available from age 50. Independent FCA-regulated advice from Verity Home covers the full market, ensuring you understand all available options and find a plan suited to your circumstances.