The government has come under fire for its perceived anti-landlord rhetoric and potential tax hikes in the upcoming Budget, which critics warn could significantly impact renters and first-time buyers.

Sam Mitchell, the chief executive of online estate agent Purplebricks, has voiced strong opposition to Labour’s anticipated increase in capital gains tax (CGT), warning it could force landlords to pay thousands more when selling properties. He believes that these costs will ultimately be passed on to tenants and prospective homeowners, driving up property prices and rent.

In an interview with The Telegraph, Mitchell cautioned that the private rented sector could see an exodus of landlords if Chancellor Rachel Reeves proceeds with the planned tax rises. “If you put capital gains tax up, you will have this rush of landlords selling up, which is bad for tenants, pushes rents up, and makes it very difficult to become a first-time buyer,” he said.

Mitchell further stressed the strain renters are already under, saying, “It’s almost impossible to save for a deposit if you’re a tenant that’s shelling out well over £1,000 a month on rent.” He noted that Purplebricks had already observed a wave of landlords exiting the market in anticipation of the Budget, due on 30 October.

The Chancellor is reportedly considering aligning CGT rates with income tax, meaning landlords selling second homes could face a top rate of 45%, compared to the current 24% cap. Such a change would add to previous policies, such as the removal of mortgage interest tax relief and a 3% stamp duty surcharge, which Mitchell argues have already contributed to rising rents and dwindling housing stock.

“It seems very popular to bash landlords,” Mitchell said, “but the trouble is, these policies end up hurting tenants by reducing supply in the sector.”

He also pointed to HMRC forecasts indicating that a significant hike in CGT could backfire, potentially costing the Treasury £2bn by 2027-28, while a more modest 1% increase might raise just £110m annually. “It won’t increase supply for first-time buyers or raise substantial funds for the Treasury,” Mitchell said, calling the strategy flawed.

Instead, he urged the government to consider offering tax relief to landlords, particularly if they sell to tenants or first-time buyers. “That could create a virtuous circle, helping first-time buyers without overly penalising landlords,” he suggested.

As the Budget approaches, tensions between the government and the private rental sector continue to mount, with landlords and industry leaders alike warning of unintended consequences for tenants in an already squeezed housing market.