"The private rental sector thrives on stability - tenants need secure homes, landlords need predictable returns. Add another layer of tax, and all you create is uncertainty, and uncertainty drives good landlords out of the market"
- Siân Hemming-Metcalfe - Inventory Base
UK landlords could see a significant rise in costs if Labour’s proposed rental tax is introduced, according to new analysis from Inventory Base. The study suggests that the average landlord could face a National Insurance (NI) bill of up to £885 per property each year.
The government is considering a major change to how rental income is taxed, with chancellor Rachel Reeves reviewing plans to apply NI contributions to rental income in her forthcoming Autumn Budget. The proposed rate is expected to be 8%.
Inventory Base calculated that an employed landlord could face an annual NI bill of £722 per property. This figure is based on 8% of the average gross annual rental income of £10,621, minus typical property maintenance costs of £1,593 per year.
Landlords in London are projected to face the highest tax burden, at £885 per property, based on post-maintenance rental income of £11,060. In the East of England, landlords are likely to see an average NI bill of £802 annually.
Other regions show varying impacts:
South East: £792 per property, after average post-maintenance income of £9,900
South West: £750
North East: £684
East Midlands: £680
West Midlands: £677
North West: £646
Wales: £608
Yorkshire & Humber: £606
Sián Hemming-Metcalfe, operations director at Inventory Base, commented, “Landlords are already trying to guesstimate and juggle any potential financial fallout of the Renters’ Rights Bill, so slapping an NI charge on rental income feels less like policy and more like punishment,” she said.
“The private rental sector thrives on stability - tenants need secure homes, landlords need predictable returns. Add another layer of tax, and all you create is uncertainty, and uncertainty drives good landlords out of the market. That doesn't protect tenants; it weakens an already fragile system. If the Government is serious about raising standards, it should be focusing on ways of maintaining the protections and standards that tenants are being promised and backing landlords to deliver, not taxing them into retreat.”
