Industry voices caution against further fiscal pressure on private landlords
In another warning against the Labour government’s plans to impose additional taxes on the private rental sector, the National Residential Landlords Association (NRLA) has cautioned that such measures could threaten ambitions for economic growth and social mobility.
As Chancellor Rachel Reeves prepares to deliver the upcoming Budget, where tax increases are expected to be announced, the landlord group has called on policymakers to recognise the sector’s role in supporting the economy. With around 11 million people renting in England, the private rented sector is viewed as essential for enabling individuals to access education, training, and employment across the country.
Research commissioned by the NRLA and conducted by former Treasury official Chris Walker indicates that private renters are more likely than homeowners to reside near city centres and their workplaces. The study found that 45% of private tenants live within five kilometres of their place of work, compared to 29% of owner-occupiers. The report concludes that the sector is instrumental in “supporting opportunity, career progression and productivity.”
This perspective is echoed by the buy-to-let division of Nationwide Building Society, which stated that the sector has “an important role to play in economic growth by supporting labour mobility.”
Further analysis by the NRLA suggests that private renting is a more common route to homeownership than social housing. Government statistics reveal that a quarter of new homeowners previously rented privately, whereas only 1% moved from social housing into homeownership.
Additional data from PwC shows that small and medium-sized landlords are responsible for supporting nearly 400,000 jobs across the UK. Research from Aldermore Bank highlights that landlords spend an average of £6,000 annually on local services, with the majority employing local tradespeople for property maintenance and improvements.
Despite the sector’s significance, a shortage of available rental properties is reportedly restricting growth and productivity. Zoopla has reported a 10% decrease in available rental homes since 2019, while tenant demand has increased by 23% over the same period. Paul Johnson, former director of the Institute for Fiscal Studies, recently told the NRLA’s ‘Listen up Landlords’ podcast that higher taxation would be “economically damaging” as it would likely further reduce the supply of rental homes and increase rents for tenants.
“The private rented sector is a significant driver of labour and social mobility,” Ben Beadle, NRLA chief executive, pointed out. “It enables people to move for work, access higher education, and seize new opportunities – everything the government wants to promote as part of its growth agenda.”
Beadle, however, stressed that instead of getting support from the government, landlords are facing yet more speculation about tax hikes that would hinder investment, reduce supply, and ultimately drive-up rents.
“The Chancellor must use this critical Budget to back responsible landlords who provide good homes and support local economies,” he said. “That means using the tax system to encourage long-term investment, as opposed to prioritising short-term revenue grabs.”
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