"Every time property ownership becomes less profitable, supply shrinks"
- Mark Bailey - Landwood Group
Following recent reports surrounding Landlord National Insurance, Mark Bailey, partner at Landwood Group, has warned that applying the tax to rental income risks pushing thousands of buy-to-let landlords into a corner.
NI could be the final turning point, he argued, accelerating sales and flooding the auction market with properties.
“Layering National Insurance on top of rental income risks being the nail in the coffin for landlords already stretched to the limit,” explained Bailey, partner at Landwood Group. “Margins are wafer-thin thanks to soaring mortgage rates, tougher regulation and an existing tax burden. Add NI into the mix, and staying in the market starts to make little financial sense. At Landwood, we’re already seeing landlords approaching us for controlled exits. Some are acting proactively, others are trying to protect their assets before it’s too late.”
Impact on supply and rents
“Every time property ownership becomes less profitable, supply shrinks,” Bailey commented. “Fewer landlords remain in the market, fewer properties are available to rent, and rents inevitably rise. Yet policymakers often seem surprised when this happens."
"National Insurance threats, coupled with suspected new levies on high-value homes and the removal of capital gains tax exemptions, don’t just affect landlords. They directly hit tenants too, making housing less affordable and intensifying pressure across the rental sector. This is a wider market issue where the private rented sector has long been a stabilising force, but measures that make investment less viable threaten to undermine the entire system.”
Auction sales on the rise
“More landlords are turning to auctions as a calculated way to exit profitably and preserve capital before margins collapse further,” Bailey noted. “Auctions offer speed, certainty and a way to stay ahead of changing taxes and regulations. We’ve seen this trend pick up steadily over the last 12 months and it’s only likely to accelerate if NI on rental income is introduced.”
Preparing portfolios against policy changes
“The key takeaway for landlords is to plan ahead,” Bailey advised. “Review portfolios, stress-test cashflows and explore options like restructuring, refinancing or controlled disposal. Seeking expert advice early ensures landlords can make decisions from a position of strength, rather than being forced into a rushed, fire-sale exit when new measures are introduced."
"Policymakers need to recognise that landlords aren’t an endless revenue source. Push them too far and supply contracts, rents rise and tenants pay the price. National Insurance on rental income could be the trigger and the market needs to be ready for the fallout.”
