"Extra tax may just be the final straw"
Chancellor Rachel Reeves’s reported consideration of levying National Insurance on rental income has drawn sharp warnings from across the mortgage and property sector, with industry leaders cautioning that such a move could worsen the UK’s housing crisis.
“Further punitive tax hikes on the rental sector will lead only to rents going up, hitting the very households the government wants to protect,” said Ben Beadle (pictured top, far left), chief executive of the National Residential Landlords Association. “It would come on top of last year’s increase to stamp duty on homes purchased to rent and proposals expecting landlords to pay up to £15,000 on energy efficiency improvements to properties.”
Beadle pointed to analysis showing that up to one million new rental homes will be needed by 2031 to meet demand. “Given this, the Chancellor should be using the tax system to encourage long term investment in new good quality rental housing,” he said. “She should also heed the advice of the Committee on Fuel Poverty and reform the tax system to support investment in energy efficiency improvements.”
Timothy Douglas (pictured top, second from left), head of policy and campaigns of trade body Propertymark, echoed concerns about the impact of recent tax changes. “Landlords in the private rented sector have been impacted significantly by tax changes in recent years,” he said.
“The UK government must understand the impact of these changes before embarking on further tax reforms that ultimately push up rent prices and reduce the number of much-needed properties to rent. Further tax imposition will mean less revenue for the Exchequer because it will drive landlords away from the market.”
The Treasury is considering a tax increase for landlords in an attempt to boost revenue by targeting “unearned income” in Rachel Reeves’s budgethttps://t.co/6EhgvP8qmS
— The Times and The Sunday Times (@thetimes) August 28, 2025
Meanwhile, Jonathan Stinton (pictured top, second from right), head of intermediary relationships at Coventry Building Society, warned that tenants would ultimately bear the cost. “This move would be another hit to landlords but it’s tenants who’ll feel the aftershock,” he said. “The intention may be to target those with multiple properties, yet the costs would likely be passed down, impacting the very people who don't own a home.”
Jeremy Leaf (pictured top, far right), north London estate agent and a former RICS residential chairman, also highlighted the risk to market confidence.
“The government may feel there is a bit more fat on this calf and can take some of it but a lot of careful thought is needed,” he stressed. “These plans might generate some additional revenue but at what cost?
“Landlords are already being clobbered by tax and regulatory changes which have reduced their profits and increased operating costs. On top of that, the Renters' Rights Bill is imminent. As it is, it is widely appreciated that there isn’t enough rental property on the market and if this plan to charge national insurance comes to pass, this extra tax may just be the final straw.”
Leaf also noted the destabilising effect of policy uncertainty. “As we have seen with the recent property tax proposals, it is all very well to put these feelers out to gauge reaction but what isn’t always appreciated that even the rumour of change can be enough to put people off. Anything that is unsettling and compromises confidence is bad news for the housing market, even if it never actually comes to pass.”
“A healthy property market needs a strong and competitive private rental sector,” Stinton pointed out. “The more landlords are taxed the less appealing it is to let a property – which could ultimately lead to fewer landlords and fewer rental homes.
“The simple but powerful forces of supply and demand would then push rents higher, making it much more difficult to rent a home. First-time buyers who are trying to save a deposit while renting could especially struggle and worry that their homeownership dreams are pushed even further out of sight.”
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