NRLA urges landlords to lobby MPs over Budget tax hikes

The National Residential Landlords Association (NRLA) is urging all landlords to write to their local MP to lobby them over tax hikes for landlords announced in the Budget.

Chancellor John Healey announced in the Budget tax rates on property and savings income will increase by a further two percentage points from April 2027, adding to the rise announced by Rachel Reeves last year.

The NRLA warns that this ‘double whammy’ will hurt renters by pushing rents higher, but having ruled out a legal challenge, is now calling on landlords to write to their local MP to raise their concerns over the tax increases.

Unjust and shortsighted

In a post on their website, chief executive Ben Beadle said: “All the predictions had been for a ‘quiet’ budget, with expectations of ‘breathing space’ amidst a cost of living crisis – so quite how a 4% surcharge on income earned from property from next April fit with this is anyone’s guess.

“This double whammy is both unjust and extremely shortsighted. We know it will only serve to hurt those the government has pledged to help, the renters who will have to come up with the cash to cover rents forced up by this unfair tax hike.

“It also goes against John Healey’s promise that his budget would be focused on growth.”

Mr Beadle pointed out the Office for Budget Responsibility (OBR) warned the measures risk driving landlords out of the market and pushing rents higher for tenants.

In its outlook report, the OBR said: “These measures collectively risk leading to a steady rise in rents through two effects. First, potential landlords are less likely to enter the market, reducing long-run rental supply, which risks a steady long-term rise in rents if demand outstrips supply – which we think is more likely than not.

“Second, landlords are likely to pass on more of these costs to renters in the long-run through a combination of some current landlords leaving, thereby giving more price setting power to remaining landlords, and greater long-run flexibility to raise rents.

“Such rises in rents would offset at least some of the reduction in the commercial viability to landlords from the measures introduced in recent years.”

Write to local MP

According to the NRLA, the tax hike could see a basic-rate taxpayer letting a flat in London needing to add £123 to the existing rent to cover the new tax rate.

The equivalent rent increase in Manchester would be £73 and in Cardiff £62.

Mr Beadle explained that, following the Budget, the NRLA met with members of the Treasury who appeared to offer some reassurance, pointing out that the tax credit for finance costs was also being uprated to 24%.

However, he described this as an “insulting attempt at mitigation”.

The NRLA said it had also spoken to legal advisers about challenging the tax hike announced in the Budget, but was told there was “no prospect of successful legal challenge”.

The association is instead urging landlords to write to their local MP to explain how the tax hike will affect them.

On its website, the NRLA says landlords can include the following points in their letters: “Your MP has an obligation to read what you send them and reply to all reasonable requests, so letting them know what you think is worthwhile.

Please consider raising the following issues:

• The impact of the recent tax rises in the Budget on you as a landlord.
• Whether or not you will have to pass on costs through rent increases to tenants.
• How the Renters’ Rights Act has affected you.
• Your concerns about the national landlords’ database tweak.