New research commissioned by Boon Brokers has found widespread opposition among UK tenants to Labour’s proposal to apply National Insurance (NI) to landlords’ rental income, with the majority fearing it would raise rents and reduce rental supply.
The survey, carried out by TLF Research with over 1,000 tenants across England, found that 88% of respondents believe the proposed tax would be unfair and lead to instability in the rental sector.
Currently, rental income is classed as investment income and not subject to NI.
The proposed change would extend NI to landlords’ profits, potentially at a rate similar to self-employed contributions of 8%.
While 56% of respondents agreed in principle that landlords should pay NI on rental income, the vast majority expressed concern about its real-world effects.
Only 12% said the measure would improve fairness or stability, while 88% said it would be unfair in practice and risk disrupting the rental market.
The main concern identified by tenants was higher rents, with 59% predicting landlords would pass on costs to tenants.
A further 46% said they expect landlords to sell up, reducing rental supply, while 23% believe the move could lead to greater dominance by corporate landlords as smaller investors exit the market.
More than half of respondents (54%) said small landlords with one or two properties would be hardest hit, compared to just 14% who expect corporate landlords to feel a significant impact.
The research also found concern that the measure could open the door to wider investment taxation.
73% of respondents said they believe the change could set a precedent for taxing other forms of investment income, such as savings interest or dividends.
Over half of respondents (51%) said they believe the proposal would damage Labour’s popularity, compared to 27% who think it would improve it.
Gerard Boon, managing director at Boon Brokers, said: “The consistent patterns of concern among respondents point to a pronounced fear and the broader impact that this policy could have on the rental sector.
“Without a meaningful volume of competitive rental prices, tenants could face higher rents and fewer choices as corporate land and homeowners further develop, compounding the affordability challenges that are already present in the UK rental market.”
