The PRS has slammed reports that the government is planning a tax raid on landlords in the forthcoming budget.
It’s been widely reported that chancellor Rachel Reeves will apply National Insurance (NI) contributions to rental income.
Rental income is currently exempt from NI.
However, the leaked reports have been condemned by many in the PRS as heightening the financial burden on landlords and forcing more to sell up.
Marc von Grundherr, director at Benham & Reeves, described the move as “political point-scoring” rather than sound housing policy.
“We’re already seeing supply pressures in many areas, pushing costs onto tenants,” added Marc.
“A policy with such serious unintended consequences deserves more scrutiny and a strategic approach, not partisan theatre.”
The context here is that many landlords are already concerned about the economic impacts of the forthcoming Renters Rights Bill, as well as the economic reality they are already operating in.
“Layering yet another financial burden onto landlords, at a time when the Renters’ Rights Bill is about to reshape the sector, is a move too far,” said Siân Hemmings-Metcalfe, operations director at Inventory Base.
“The focus should be on stability and encouraging long-term investment into the rental market, not short-term populism designed to plug holes in the Treasury's coffers.”
As well as reducing PRS supply, there are concerns this could lead to further rent hikes.
Ben Beadle, CEO at the National Residential Landlords Association, said this was likely as landlords were already having to deal with the recent stamp duty increase on homes purchased to rent.
These higher costs, in addition to a growing need for more PRS housing supply, further undermine the need for the Budget’s planned tax raid, he has argued.
“Given this, the chancellor should be using the tax system to encourage long term investment in new good quality rental housing,” said Ben.
“She should also heed the advice of the Committee on Fuel Poverty and reform the tax system to support and encourage investment in energy efficiency improvements.”
