Rumours have been circulating that the Treasury is considering charging National Insurance on rental income, which some reports suggest could raise an extra £2bn-3bn.
Currently, landlords who own property in their own name pay income tax, and in some cases, landlords can make voluntary National Insurance contributions (NICs) if they are “gainfully employed”.
According to research from Pegasus Insight in its latest Landlord Trends Q3 2025 report, nearly three-quarters of landlords were very concerned about possible changes to capital gains tax (CGT) on property sales, going up to 85% for those who have sold or intend to sell property in the coming year.
The report added that 40% of landlords plan to sell at least one property in the next year, with only 7% planning to buy. This shows the “continuation of a supply squeeze that has already driven rents to record highs”.
Mark Long, founder and director of Pegasus Insight, said: “The tax burden is now seen by landlords as every bit as threatening as regulation. The possibility of a new NI charge on rental income is causing alarm across the sector, not just because it would erode profitability, but because it would further undermine confidence in what has already become a heavily taxed form of investment.
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“Many landlords feel that another policy shock, on top of capital gains tax and the Renters’ Rights Act, could tip the balance and force them to sell.”
Long added: “Every indication from our data is that a growing number of landlords are reassessing their position. If the November Budget adds yet another layer of taxation, we can expect more to exit the market in 2026, further reducing rental supply at a time of rising demand.
“The government needs to tread carefully – short-term revenue gains could come at the expense of long-term housing stability.”
