Autumn Budget 2025: Landlords brace for National Insurance threat

Leading PRS figures say the proposal to bring a landlord’s rental income into the scope of National Insurance comes at the worst possible moment.

Its introduction will pile pressure on landlords who are already grappling with the demands of the Renters’ Rights Act and fragile market confidence.

Experts say the move in tomorrow’s (26 November) Autumn Budget would increase costs for hundreds of thousands of private landlords and risk another wave of exits from the sector.

More landlord tax

Sián Hemming-Metcalfe, the operations director at Inventory Base, said: “Talk of pushing more tax onto landlords – particularly the idea of applying National Insurance to rental income – is hitting the sector at exactly the wrong moment.

“Landlord numbers haven’t collapsed, but the early signals aren’t reassuring; new buy to let activity remains sluggish, smaller landlords are stepping back, and the sector is already bracing for the operational and compliance overhaul brought in by the Renters’ Rights Act.

“Smaller landlords, who shoulder much of the day-to-day responsibility for providing safe, decent homes, are the first to retreat when the goalposts keep shifting.”

She added: “If the ambition is a safer, more professional, more compliant rental sector, then policy needs to support stability – not squeeze it out of existence.”

NI on rental income

Sam Humphreys, the head of M&A at Dwelly, said many owners are already overwhelmed and said: “Talk of bringing rental income into the scope of National Insurance has caused understandable concern ahead of the Autumn Budget, particularly among independent and accidental landlords who are already carrying a heavy burden of change.

“While this may not be the final financial nail in the coffin for the sector, it would represent yet another layer of cost at a time when landlords are dealing with the monumental shift introduced by the Renters’ Rights Act.”

He adds: “What the sector needs now is stability and clear direction, not further penalisation or measures that undermine the financial viability of buy to let investment.”

NI will hit smaller landlords

Colin Stokes, the founder and managing director of Adiuvo, said: “The proposed National Insurance charge on rental income may not apply to the professional landlord who runs their portfolio as a business, nor to the new wave of Build to Rent investors.

“But the government continues to overlook the wider knock-on effect of policies that deter investment in the rental sector.

“Whether the landlord is accidental, amateur or professional, fewer investors entering or remaining in the market means fewer homes available for renters.”

Matt Hutchinson, a director of SpareRoom, said: “Tenants are contending with record-high UK rents.

“Boosting rental supply is the most effective way to reduce rents, but there isn’t time to wait for housebuilding targets to be met.

“Right now, we could be making far better use of existing housing stock, including empty buildings and under-occupied homes.”

Other Budget worries for landlords

While the debate over National Insurance dominates the landlord conversation, the property market more broadly is jittery about sweeping tax reforms.

Rightmove data shows sales for homes worth more than £2 million, which could fall under a mansion tax, are down 13% year-on-year.

Properties between £500,000 and £2 million have seen an 8% drop in agreed sales, while the sub-£500,000 bracket has slipped by 4%.

The platform’s property expert, Colleen Babcock, said: “Rumours of the contents of the forthcoming Budget are affecting the market, as we’re seeing a greater hesitation in sales activity, especially at the upper end, which has been the focus of most of the discussion.”

Stamp Duty worries

Stamp duty speculation is also fuelling anxiety and, in England, 30% of homes for sale are priced over £500,000 and could be subject to a possible new annual levy.

In London, the figure rises to 59%.

Capital Gains Tax rumours are stirring similar concerns, with talk of applying CGT to main residences valued at over £1.5 million.

Agents warn this could freeze downsizing chains and trap families in homes that no longer fit their needs.

Even small hints of reform, agents say, are already slowing down activity.

Property118 commercial reality check

Noise around National Insurance and sweeping tax reform creates tension, yet commercially minded landlords know that volatility rewards those who plan early and act with intent. Policy may shift but discipline, structure and modelling always preserve advantage.

What serious landlords should do next

Document and audit readiness: Update rent schedules, valuation notes and mortgage data so you can model NI exposure and scenario-test 2025 cash flows with accuracy.

Smart refinancing: Stress-test gearing across several rate paths and explore early refinancing options. A controlled restructuring now can harden margins before any new levy lands.

Selective disposals: If weaker assets no longer justify their capital load, consider selling on your own terms. Portfolio pruning strengthens the balance sheet and reinforces long-term resilience. If you are considering selling, it is worth reviewing this guide on calculating Capital Gains Tax before making any decisions: https://www.property118.com/why-every-landlord-should-calculate-cgt-before-selling-a-single-property/

Structural planning: Review ownership structures so the portfolio operates like a business, with clean lines of liability and maximum refinancing flexibility. A mid-cycle structure review often uncovers efficiencies.

Capital redeployment: Model the return on capital across your stock. Shifting capital from underperforming units into higher-yield or more diversified assets can offset future tax drag.

Delegation and automation: Systemise maintenance logs, inspection workflows and compliance tasks. Freeing operational time creates capacity to think strategically while others react emotionally.