Landlord national insurance would be a “tax on working people”

A prominent housing committee has warned Chancellor Rachel Reeves that rumoured plans to make landlords pay National Insurance on rental income could lead to higher rents for tenants and act as a “tax on working people.”

The comments by Sir Vince Cable, chair of the Independent Housing Policy and Delivery Oversight Committee, warn rumours of property tax changes in the upcoming Autumn Budget would be “a step in the wrong direction.”

The committee, funded by the Family Building Society, monitors the government’s pledge on meeting 1.5 million homes and provides independent analysis and policy recommendations on housing delivery.

Putting National Insurance tax on landlords would lead to higher rental charges

In its first meeting, the committee acknowledged the need for housing reform but urged caution over rumoured tax measures in the Autumn Budget, following media reports suggesting landlords could be required to pay National Insurance on rental income.

Sir Vince Cable, chair of the committee, said: “There is no doubt that the housing market is not working efficiently, and property taxation is a significant factor. The case for major reform of the whole property tax system, from Stamp Duty Land Tax to inheritance tax to council tax and VAT, is almost unarguable.

“Recent speculation about piecemeal changes in the Budget for revenue-raising purposes, if they came about, would be a step in the wrong direction. To take just one example, putting National Insurance tax on landlords would be most likely to lead to higher rental charges.

“That is, in effect, an increase in taxation on working people.

“The reality is that wholesale reform is needed to make the market work more efficiently and achieve improvements in housing provision across the country. This is no small task, and we do not underestimate its complexity or the political dimension.”

Properly functioning, the housing market can bring great benefits

During the committee meeting, members identified key aspects of the housing crisis which need to be improved and in which changes are measured.

The challenge of would-be buyers, who are renting, being able to save for a deposit for a mortgage and how older people might downsize to accommodation better suited to their needs and the regional disparities in providing affordable homes.

Mr Cable adds the housing market can bring huge benefits to the economy and the committee will continue to push for comprehensive reform of the housing system

He said: “Properly functioning, the housing market can bring great benefits, improvements to the economy, greater labour mobility, supporting skills development and providing more and better-quality housing, to name but a few.

“As an independent committee our aim is to bring a non-partisan, well-informed, critical, but constructive, eye on developments in this vital part of the fabric of the country. It is in all our interests that everyone has safe, well-designed and built accommodation. We are not there at the moment, and we are committed to doing all we can to help the government achieve those aims.”