Politics

Copy article

Experts warn new NI levy will send rents soaring – “The coup de grâce for landlords”

ended 28. August 2025

LANDLORDS could be hit with a new National Insurance levy on rental income in the Autumn Budget, in a move the government is apparently considering to plug the black hole in public finances.

But experts warn such a step would be the final straw for landlords already battered by years of tax changes, and predict that tenants — not landlords — will end up footing the bill through higher rents.

Michelle Lawson, Director at Fareham-based Lawson Financial, said tenants will ultimnately foot the bill.

She said: “The assault of successive governments on landlords continues. A move like this will simply push rents up further as landlords seek to cover the increased costs. In short, the tenant will likely foot the bill and they, as we all know, are already stretched beyond belief. 

"Unless there is an ulterior motive, other than complete decimation of the rental sector and landlord, I cannot fathom why this is happening.”

Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, agreed, adding: "Landlords have long been successive governments’ soft target, and this could be the coup de grâce. Further taxes on landlords' ever-decreasing profits will see them either exit the sector or push up rents to cover the tax. 

"If even more landlords exit the sector, supply will drop and rental prices will go stratospheric. Make no mistake, it will be working people and tenants who will ultimately pay the price of this move if it is implemented."

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, said: “In 1381, we had the Peasants Revolt. In 2025 we are going to have the Reeves Revolt. This idea has been floated before but it could become a reality. Landlords with properties in their personal names should be seeking professional advice as that golden egg could become a noose around their necks. 

"Tenants, also known as tomorrow’s first-time buyers, will foot the bill one way or another. Regardless, Reeves simply has to go. She may have the PM’s support but she has neither the support nor the confidence of the British public.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said: "This proposed move reminds me of the proverb, ‘You can shear a sheep many times, but you can skin it only once’. 

"Landlords have been easy pickings for the Chancellor looking for a quick way to raise income. This could be a step too far, causing serious increases in debt and resulting in more landlords exiting the market."

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, said the lack of supply is the key problem that needs addressing.

He added: “The failure to build enough houses has led several governments to target landlords and try and force them out of the market in the belief that it will enable people to buy houses. 

"It's at best a sticking plaster but in the meantime the government hits landlords with more tax, either National Insurance if you keep it or capital gains tax if you sell.”

Graham Wells, Founder and Financial Coach at Haddington-based GroWiser Financial Coaching, questioned the government's understanding of supply and demand.

He said: “It makes you wonder if the government really understands the basic fundamentals of supply and demand. Whatever your views on landlords, it's a fact that the private rental sector is shrinking due to a tightening of regulations and tax policy. 

"Introducing national insurance on rental income, whether right or wrong in principle, will feed the decline in available homes and increase rental costs further. Whatever the Chancellor hopes to raise in additional taxation will ultimately be passed onto tenants, who are already stretched.”

9 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Michelle LawsonVerified
Director at Lawson Financial
The assault of successive governments on landlords continues. A move like this will simply push rents up further as landlords seek to cover the increased costs. In short, the tenant will likely foot the bill and they, as we all know, are already stretched beyond belief. Unless there is an ulterior motive, other than complete decimation of the rental sector and landlord, I cannot fathom why this is happening.
Star Quote
Copy

Editor
Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
Landlords have long been successive governments’ soft target, and this could be the coup de grâce. Referring to rental income as unearned is unfair on many landlords who have worked hard to generate that income. Further taxes on landlords' ever-decreasing profits will see them either exit the sector or push up rents to cover the tax. If even more landlords exit the sector, supply will drop and rental prices will go stratospheric. Make no mistake, it will be working people and tenants who will ultimately pay the price of this move if it is implemented.
Copy

Editor
Riz MalikVerified
Independent Financial Adviser at R3 Wealth
In 1381, we had the Peasants Revolt. In 2025 we are going to have the Reeves Revolt. This idea has been floated before but it could become a reality. Landlords with properties in their personal names should be seeking professional advice as that golden egg could become a noose around their necks. Tenants, also known as tomorrow’s first time buyers, will foot the bill one way or another. Regardless, Reeves simply has to go. She may have the PM’s support but she has neither the support nor the confidence of the British public.
Copy

Editor
Samuel Mather-HolgateVerified
Managing Director & IFA at Mather and Murray Financial
Countless governments have tried to kill the goose that laid the golden egg, and if this tax change goes through there will be no breakfast served up for Rachel Reeves. Landlords are leaving the industry in their droves, and such a move will surely make profitability impossible for those that remain.
Copy

Editor
Rob MansfieldVerified
Independent Financial Advisor at Rootes Wealth Management
The failure to build enough houses has led several governments to target landlords and try and force them out of the market in the belief that it will enable people to buy houses. It's at best a sticking plaster but in the meantime the government hits landlords with more tax, either National Insurance if you keep it or capital gains tax if you sell.
Copy

Premium
Debbie PorterVerified
Managing Director at Destination Digital Marketing
By pushing up minimum wage by 6.7% for people 21 years and over, by 16.3% for 18-20 year olds and by 18% for 16-17 year olds and apprentices, coupled with raising employer NICs from 13.8% to 15%, we have already seen the impact on unemployment figures in these age brackets. There has been a significant rise in unemployment and a sustained fall in job vacancies over the last three years. The very people she is setting out to ‘help’ are unemployed, where getting on the property ladder will be the last thing on their minds. Does Rachel Reeves believe that increasing pressure on landlords, that have already been hit with so many other levys, will keep rents low? The scarcity caused by a mass sell-up by landlords will push up rents, with the housing market still out of reach for much of the population.
Copy

Keith BuddenVerified
Managing Director at Ensurety
This to me is a bit of a tricky one, on the one hand it has always been a bit of an anomaly, that landlords don't pay NI on rental income, against which however, we know that the number of private landlords is in decline (and that is likely to accelerate as Labour plans for property taxes become clearer), yet demand for housing is at an all time high and the first step into their own home for most people is a room in an HMO (house in multiple occupation), and the bulk of HMOs are owned by private landlords, so if they pull out and put the property on the market, it is not one household made homeless but four, six, eight or even ten. This then puts an intolerable strain on local authority housing services (who themselves have less money to play with). As the saying goes, he who pays the piper plays the tune, and if private landords depart en masse, that tune could be the sound of deflating bagpipes.
Copy

Patricia McGirrVerified
Founder at Repossession Rescue Network
This proposed move reminds me of the proverb, “You can shear a sheep many times but you can skin it only once". Landlords have been easy pickings for the Chancellor looking for a quick way to raise income. This could be a step too far, causing serious increases in debt and resulting in more landlords exiting the market.
Copy

Graham Wells0
Founder and Financial Coach at GroWiser Financial Coaching
It makes you wonder if the government really understands the basic fundamentals of supply and demand. Whatever your views on landlords, it's a fact that the private rental sector is shrinking due to a tightening of regulations and tax policy. Introducing national insurance on rental income, whether right or wrong in principle, will feed the decline in available homes and increase rental costs further. Whatever the Chancellor hopes to raise in additional taxation will ultimately be passed on to tenants, who are already stretched.