The National Residential Landlords Association (NRLA) has issued a robust call to Chancellor Rachel Reeves ahead of the forthcoming Autumn Budget, emphasising the critical need for government support for the private rented sector (PRS). As speculation mounts regarding potential tax increases, the NRLA warns that any additional taxation could adversely affect both landlords and tenants, undermining the essential role of the PRS in the UK economy.

The NRLA's chief policy officer, Chris Norris, articulated the urgency of the situation, stating that the Chancellor faces significant challenges in her second Budget Statement. He cautioned against the temptation to implement tax measures that could yield short-term revenue but ultimately disincentivise investment in the housing market. Norris asserted, "Every pound a landlord is encouraged to invest drives local economic activity, adds to supply, and improves stock. Tax increases that reduce rental supply and drive-up costs are not just bad for landlords; they are economically damaging and ultimately harm tenants through higher rents and less choice."

The potential introduction of a National Insurance charge on rental income and a shift from stamp duty to a property tax on homes valued over £500,000 have raised concerns within the landlord community. The NRLA contends that such measures could lead to increased operational costs for landlords, which would likely be passed on to tenants in the form of higher rents. Therefore, the association is advocating for a strategy that supports landlords rather than penalises them.

The call for the unfreezing of local housing allowance (LHA) rates stands out as a key priority for the NRLA. After the Conservative government had previously lifted the four-year freeze on LHA rates, the Labour government reinstated the freeze during last year's Budget. The NRLA argues that restoring LHA rates to the 30th percentile of local market rents is essential for providing low-income renters with access to housing. Norris emphasised that unfreezing LHA rates is not a subsidy for landlords but a crucial mechanism to prevent low-income tenants from falling into rent arrears and facing homelessness, which places a strain on local authority budgets.

The NRLA has also highlighted the pressing need for targeted support for landlords to meet energy efficiency standards set by the government. With the expectation that all private rented properties will achieve EPC C ratings by 2030, the NRLA is seeking tax efficiencies to facilitate the retrofitting of properties. Proposed measures include enhanced capital allowances for energy efficiency improvements, enabling landlords to offset costs against tax more quickly. Norris reiterated that clarity regarding targets, timelines, and available funding is urgently needed to incentivise landlords in this transition.

The implications of the Autumn Budget extend beyond the financial health of the landlord community; they also significantly affect the availability and affordability of rental housing for tenants. The NRLA's position underscores a broader concern that any financial burdens placed on landlords could exacerbate the existing housing crisis, limiting choices for tenants and potentially leading to increased homelessness rates.

As the Budget approaches, the government’s decisions will be pivotal. If the Chancellor opts to implement supportive measures for the PRS, it could catalyse investment and enhance housing availability in the long run. Conversely, a punitive approach could lead to a further contraction in the rental market, diminishing the capacity of landlords to provide affordable housing.

Landlords are advised to stay vigilant and engaged with the developments surrounding the Autumn Budget, as the outcomes will have immediate and long-term repercussions on the viability of the rental market. The NRLA's advocacy for supportive policies presents an opportunity for the Chancellor to align fiscal measures with the pressing needs of both landlords and tenants, fostering a healthier housing ecosystem in the UK.