NRLA urges Chancellor to support landlords in upcoming Budget

Ahead of the Autumn Budget, the National Residential Landlords Association (NRLA) is calling on Chancellor Rachel Reeves to support the private rented sector (PRS).

The NRLA warns Ms Reeves rather than add “another layer of taxation” to landlords, the Budget should recognise the vital role the PRS plays in the economy.

Media speculation ahead of the Budget includes proposals to extend National Insurance to rental income and replace stamp duty with a property tax on homes valued over £500,000.

Chancellor faces the biggest challenge of her political career

Chris Norris, chief policy officer, writes on the NRLA website: “The Chancellor faces the biggest challenge of her political career in deciding what she wants to use her second Budget Statement to achieve.

“She could take the easy route and introduce a set of tax measures that penalise our sector for short-term revenue gains, disincentivise investment and further squeeze those of us still providing homes.

“Or she could break with recent orthodoxy and use the tax system to incentivise long-term investment in good quality, secure homes. Every pound a landlord is encouraged to invest drives local economic activity, adds to supply, and improves stock.

“As an association, we have repeatedly urged the Chancellor to recognise the vital role the PRS plays in the economy.

“Tax increases that reduce rental supply and drive-up costs are not just bad for landlords; they are economically damaging and, ultimately, harm tenants through higher rents and less choice.”

Without financial support, the burden falls entirely on landlords

The NRLA is calling on the Chancellor should unfreeze local housing allowance (LHA) rates and support landlords for EPC improvements.

The Conservative government announced an end to the four-year freeze to LHA rates in 2023; however, the Labour government froze the LHA rates again during the Budget last year.

The NRLA has campaigned to restore LHA rates to the 30th percentile of local market rents, arguing that unfreezing the rates would help low-income renters

Mr Norris said: “Contrary to what some seem to believe, this is not a subsidy for landlords, but a vital mechanism to increase access to homes whilst preventing low-income tenants from falling into rent arrears and facing homelessness, which places enormous strain on local authority budgets.

“Unfreezing LHA would provide immediate, targeted relief where it is needed most and save government money in the long-term.”

For EPC improvements, Mr Norris says more targeted support for landlords is needed, as the government has proposed, but not yet made law, that all private rented properties meet EPC C targets by 2030.

He said: “We are seeking tax efficiencies to help landlords retrofit properties. This could take the form of an enhanced capital allowance for energy efficiency improvements, or the redesignation of retrofit measures as revenue expenses, allowing the cost to be offset against tax more quickly.

“In the immediate term we need certainty about targets, timelines, and what funding is likely to be available to the PRS.

“Without financial support, the burden falls entirely on landlords, which risks either disincentivising investment or driving up rents to cover the capital cost.”