"The more you tax landlords, the more you squeeze them out of the market, which means that rents rise and fewer people can afford to rent"
- John Davidson - Perenna
Further pressure on landlords could ultimately harm tenants and first-time buyers, according to property industry leaders, as speculation grows over potential new tax measures in the private rental sector.
Concerns have intensified following suggestions that the Chancellor may target landlords with tax rises, including possible National Insurance contributions on rental income, to shore up public finances at a future fiscal event.
At a recent roundtable hosted by communications consultancy MRM, sector leaders warned that increasing financial burdens on landlords risks reducing rental supply and pushing up costs for tenants.
“The more you tax landlords, the more you squeeze them out of the market, which means that rents rise and fewer people can afford to rent,” said John Davison, head of product, proposition & distribution at Perenna. “So, ultimately, it’s the tenants that lose out.”
Governments have introduced a series of measures in recent years aimed at limiting landlord advantages. In 2015, former Chancellor George Osborne raised stamp duty rates for buy-to-let properties and later phased out mortgage interest tax relief.
More recently, the Labour government has advanced plans to introduce tighter regulation through the Renters’ Rights Bill and is also considering stricter energy efficiency rules for privately rented homes by 2030.
Elise Coole, managing director of Keystone Property Finance, noted a shift in the landlord profile as regulatory pressures mount. “We are seeing more Limited Company landlords and, on the whole, they are the younger generation responding to new market conditions,” she explained. “The limited company is now firmly the structure of choice for younger investors starting out on their journey.”
Comments from Labour leader Sir Keir Starmer in October further unsettled the landlord community. His claim that landlords do not fall under the category of “working people” prompted fears that they may be more exposed to future tax increases.
Despite these concerns, Jeni Browne, sales director at broker MFB, expressed confidence in the sector’s resilience and long-term outlook. “There was a big influx of buy-to-let landlords in their 30s and 40s after the credit crisis, with more lenient lending parameters at that time,” she said. “Most are now building up to retirement and now seeing too much hard work, too much regulation and now just want to sell.
“But I do think we’re going to have a new wave of smaller landlords coming back to the table with a clean slate who have their eyes more open to what being a landlord is now. The private rental sector is a fantastic place to be; it offers social security and provides a really important service as well.”
The discussion highlighted deepening uncertainty in the private rented sector, with tax and regulatory changes prompting ongoing shifts in landlord behaviour and market dynamics.
