Rents could rise for thousands of Londoners in properties owned by wealthy foreign investors after major Budget tax changes, it emerged on Thursday.

Overseas landlords are being hit by a series of tax rises, including new rules which mean their companies will move from being charged income tax on their rental income to corporation tax.

While the headline rate is similar at 19%, corporation tax is not subject to the same breaks. Most significantly, corporate taxpayers get less relief for the interest payments on their debts.

Aidan Sutton, partner at PWC, said: “Most big landlords are highly leveraged, so this could mean a very big bill. This will no doubt influence what they charge their tenants in rent, including thousands of London renters as well as business occupiers.”

The impact will be felt by foreign landlords paying interest of £2 million a year, suggesting property portfolios of upwards of around £180 million will be worst affected.

Some property experts said the tax changes would put foreigners off buying UK properties. As well as losing tax relief on their debt repayments, they will now face the prospect of paying corporation tax on the profit they make when they sell their properties. Currently, as a non-UK resident company, such capital gains are tax exempt.

International investors are also likely to be “annoyed” by new plans announced in the Budget to give local authorities the ability to charge up to 100% extra for council tax on unoccupied homes.

But John Collier-Wright, whose firm JR Capital buys properties in London for Middle Eastern investors, said the move would not deter buyers.

“Property taxes here are much lower than most other countries, so an increase from £2000 to £4000 on an average home in central London won’t be a big deal… It’s just annoying,” he said.

Becky Fatemi at West End agent Rokstone, also pointed out it will be tough "to monitor which properties are empty and which are not”.