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14/7/25 8:13 pm
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Most brokers’ landlord clients are set to slim down their portfolios if National Insurance is applied to rental income.
Plans leaked by HM Treasury reveal that Chancellor Rachel Reeves believes this extra tax on landlords will raise an additional £2.3 billion for the government as she struggles to plug a reported £40 billion hole in the nation’s finances.
Polling by buy-to-let lender Landbay found that more than seven in every ten brokers (72%) say their landlord clients are set to reduce their portfolios. More than a quarter thought their landlord clients will sell some of their properties - slimming down their portfolios but staying in the PRS - while almost half (45%) thought clients would sell all their properties and exit the market.
If 45% of landlords sell up, the Chancellor’s move will raise less than £2.3 billion, according to Rob Stanton, sales and distribution director at Landbay. “The amount of tax she expects to raise is based on ONS figures which show that, during the most recent tax year data published (2022/3), some 2.2 million landlords received £27 billion in rental income. I am worried this might backfire though,” he says.
“First, she’s not going to raise that much if a million landlords sell-up, however resilient the sector is in the face of market interference. Second, this could drive up rents – as demand for rental property outstrips diminishing supply and remaining landlords look to recoup the cost by raising rents. That could exacerbate the housing crisis for renters.”
The one positive, given that smaller landlords are the ones most likely to leave the market, is that this could lead to increasing professionalism in the private rented sector, adds Stanton, and drive moves to limited company structures as landlords look to adapt to the change.
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