Let’s be honest, we will not fix Britain’s housing problem by treating landlords as the enemy. A healthy and investable private rented sector PRS is essential especially while social housing remains in short supply.
Demonise the very people providing homes and you get less investment, fewer properties and higher rents. It’s that simple.
However, it’s not just about those investing, it’s about giving tenants greater ability to get onto the housing ladder and so let’s start praising two lenders who stepped up and began recognising verified rental payment history in affordability assessments. As I have often argued over the years, if you’ve proved that you can meet rent that often exceeds a comparable mortgage payment, that data should carry weight at application. Building societies like Suffolk and Skipton showed what can be done by using rent in the assessments, but few have subsequently followed and it’s time for the big retail banks to follow, or we risk a two-tier system where only a minority of borrowers benefit.
Regarding supporting those investing in residential property, unfortunately, we’ve seen two unnerving policy changes from the government that could set us back and drive more landlords out of investing in either more property or even worse, start to sell off stock or exit the market completely.
The Budget’s impact
Extending National Insurance to rental profits might raise headlines, but it will do more harm than good. Layering an NI charge on top of existing income tax, particularly when interest relief is already restricted, squeezes smaller, leveraged landlords and, ultimately, tenants. If the test for any tax change is “does it raise what we think, without doing more harm than good?”, this fails on both counts.
We have also seen recently the first steps towards council tax ‘modernisation’. Reform is overdue but tinkering that simply raises revenue without fixing 1990s banding risks stealth taxation and unintended consequences for tenants and landlords alike. As I’ve said before, unless policymakers squarely address outdated valuations and funding gaps for local authorities, we’ll just shuffle costs around the board and erode trust.
There’s also been bold rhetoric about ‘transformational’ housing plans, which is encouraging as we need ambition. But transformation is measured in starts and completions, not slogans. Planning reform, supply-side delivery and tenure neutrality must be the priority, with private investment seen as part of the solution rather than something to be taxed into retreat.
1. Make rental data mainstream. Mandate a simple, industry-wide mechanism for reporting rent into affordability and credit models. Lenders already have the tech, what’s missing is consistency and scale. The prize is thousands more creditworthy first-time buyers
2. Tax policy that passes the ‘do no harm’ test. Park ideas that single out landlords for additional levies (like NI on rental profits) and focus instead on measures that expand supply and improve standards. If you want better tenant outcomes, you need more homes, not fewer investors
3. Smart council tax reform. If reform happens, be transparent about winners and losers and align banding with modern valuations. Don’t load costs onto exactly the households and properties we need to keep serving
Landlords aren’t deep-pocketed corporations. Many are ordinary investors with one or two properties, carrying debt, and trying to run viable, compliant businesses. Policy that narrows margins without improving delivery drives exits. Exits reduce supply. Reduced supply raises rents. Tenants lose. It’s a feedback loop we should all want to break.
Supporting investment
Let’s face it, investor sentiment will hinge on tax clarity. Put NI-on-rent rumours to bed, and we may see more capital redeployed into upgrading stock and selective acquisitions. By prolonging the uncertainty and you prolong the supply crunch. In addition, regulatory delivery matters. Big promises on planning and renters’ rights must be implemented with an eye to maintain investment into the sector, not drain it.
Also, there’s the ESG issue looming and with housing stock in the UK the oldest in Europe, making UK housing stock more energy efficient is something that owner occupiers and investors will have to consider in future years. To do this, we have to prioritise realistic ways to pay for energy-efficiency upgrades. Incentives will deliver more improvement than blunt sticks.
Ultimately, let’s stop the landlord-bashing. Tenants, landlords, lenders and policymakers are on the same side when the goal is more homes, at a better quality and with better and fairer standards for landlords and tenants alike. Reward what works and investment will follow, but keep reaching for short-term revenue levers, and we’ll get exactly what we’ve had, which is too few homes, leading to a housing crisis for this generation and many more who follow.
