Autumn Budget 2025: National Insurance on Rental Income Could Drive Up Rents, Warns Report

With the Autumn Budget 2025 just weeks away, growing speculation suggests that the Chancellor may consider extending National Insurance to rental income — a move that could have major implications for landlords and tenants alike.

Recent analysis from Coventry Building Society warns that such a policy could result in a “double blow” for renters, as landlords facing higher costs may be forced to either pass them on through rent hikes or exit the market altogether. The concern adds to the mounting uncertainty surrounding the government’s broader property tax reforms.

Rising Costs and Shrinking Supply

If National Insurance were applied to rental income, property investors would face an additional layer of taxes on top of the existing obligations. Many in the sector argue this would leave landlords with few options other than increasing rents to offset the burden.

A potential sell-off by smaller landlords could further tighten the rental market, already strained by high demand and limited supply. For prospective tenants, this would likely translate into steeper rent prices, while those saving for a first home may find it even more difficult to put money aside each month.

First-Time Buyers May Also Feel the Squeeze

At the same time, discussions about replacing stamp duty with a property tax on homes valued above £500,000 have raised new concerns. While such a change might initially appear to help first-time buyers by reducing upfront costs, experts warn it could lead to fewer homes entering the market.

If property owners at the higher end face additional charges when selling, they may choose to delay moving, slowing down the flow of available housing. This could restrict opportunities for families seeking larger homes and reduce the number of entry-level properties for new buyers.

Adding to this, there are suggestions that stamp duty payments could be made in instalments, potentially easing the immediate burden for buyers. However, this approach could also introduce an ongoing monthly cost, making affordability more challenging in the long run.

What to Expect Ahead of the Budget

As the Autumn Budget 2025 approaches, property professionals and investors are watching closely to see how these potential tax changes unfold. Extending National Insurance to rental income would mark a significant shift in the way property-related earnings are treated, potentially reshaping landlord behaviour across the country.

While the government has not yet confirmed any formal plans, the possibility of simultaneous reforms — including a new property tax for higher-value homes — indicates a clear push towards redistributing tax burdens. The coming weeks will likely determine whether these ideas remain speculative or translate into real change that could reshape both the rental and housing markets.