Rental tax rises would hit growth and job prospects in the private rented sector (PRS), warned the National Residential Landlords Association (NRLA) just before the Budget.
A report for the NRLA by former treasury official Chris Walker found private renters lived closer to city centres and their workplaces than homeowners.
Research found 45% of private renters lived within 5km of work compared to 29% of owner-occupiers.
The report said the sector played a role in “supporting opportunity, career progression and productivity.”
Additionally, analysis found private renting offered more people a step towards homeownership than social housing.
Government figures showed 25% of new owner-occupiers had rented privately first, compared to 1% from social housing.
Accountancy firm PwC found small and medium-sized landlords supported almost 400,000 jobs in the UK.
Research from Aldermore Bank found landlords spent an average of £6,000 a year on local services, and nearly four in five used local trades for property maintenance.
Zoopla reported the number of homes to rent had dropped by 10% since 2019 while tenant demand had risen by 23%.
Paul Johnson, former head of the Institute for Fiscal Studies (IFS), told the NRLA podcast that higher taxes would mean fewer homes to rent and higher rents.
Ben Beadle, CEO of the NRLA, said: “The private rented sector is a significant driver of labour and social mobility.
“It enables people to move for work, access higher education, and seize new opportunities – everything the Government wants to promote as part of its growth agenda.
“Instead, landlords are facing yet more speculation about tax hikes that would hinder investment, reduce supply, and ultimately drive-up rents.”
Beadle added: “The Chancellor must use this critical Budget to back responsible landlords who provide good homes and support local economies.
“That means using the tax system to encourage long-term investment, as opposed to prioritising short-term revenue grabs.”
