Rachel Reeves Faces Backlash Over ‘Tax Raid on Landlords’ as Rent Fears Grow
Chancellor Rachel Reeves is under fire after reports emerged that the Treasury may introduce a national insurance charge on rental income, prompting warnings of rising rents across the UK. Critics have described the proposal as a risky manoeuvre that could destabilise the housing market.
The planned levy aims to generate around £2 billion ahead of the autumn budget, amid concerns over the state of public finances. Officials say it targets landlords’ property earnings, framing the move as a way to tap into “unearned revenue.”
Property expert Kirstie Allsopp did not hold back in her criticism. Speaking to Times Radio, she said: “This is economically destabilising. It’s literally like having the economy run by Baldrick.
She keeps on coming up with the cunning plans and she needs to go and sit in a corner and think about how to save money and improve the economy, not constantly be taking money from people because this will impact tenants.”
The comparison to the hapless Blackadder character has resonated widely online, reflecting widespread scepticism over the potential impact on tenants.
While some Labour MPs and government aides support the tax as a way to raise revenue without increasing VAT, income tax, or employee national insurance, landlords and housing experts warn of unintended consequences.
Ben Beadle, chief executive of the National Residential Landlords Association, warned: “Further punitive tax hikes on the rental sector will lead only to rents going up, hitting the very households the Government wants to protect.
It would come on top of last year’s increase to stamp duty on homes purchased to rent and proposals expecting landlords to pay up to £15,000 on energy efficiency improvements to properties.”
Reeves eyes tax raid on landlords to raise £2bn. Anyone who thinks rental income is “unearned” has never been a landlord.#TomorrowsPapersToday pic.twitter.com/WrQK9FhYwh
— Peter (@deGourlay) August 27, 2025
He cited analysis from estate agent Savills predicting a need for one million new rental homes by 2031. Mr Beadle stressed that tax policies should incentivise long-term investment in quality housing rather than discourage it.
Tom Bill, head of UK residential research at Knight Frank, echoed the concerns: “Targeting landlords won’t lose the government many votes but such moves invariably end up hurting tenants.
With landlords already selling up ahead of the Renters’ Rights Bill and tougher green regulations, another disincentive would reduce supply further and put upwards pressure on rents. Those that stay may pass on the extra costs in other ways.”
Employee national insurance contributions (NICs) currently range from 2% to 8% depending on earnings, but the Treasury argues that expanding the levy to rental income does not technically break Labour’s pledge against raising rates.
Treasury insiders reportedly see the measure as a way to boost revenues without crossing three “red lines” – VAT, income tax, and NIC hikes. If enacted, the extra tax could bring in an estimated £2 billion.
The stakes are high. The NIESR economic think tank recently warned that Ms Reeves could face a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts by 2029-30.
When asked about the reports on Thursday, education minister Stephen Morgan avoided specifics. He told Times Radio: “Obviously taxation policies are a matter for the Chancellor of the Exchequer, and she will set out more detail in the budget later this year.”
A Treasury spokesperson emphasised that economic growth, not just tax measures, is central to strengthening public finances: “Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.
We are committed to keeping taxes for working people as low as possible, which is why at last autumn’s budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance, or VAT.”
The debate over the proposed Rachel Reeves tax raid on landlords is expected to intensify as the autumn budget approaches, with landlords, tenants, and policymakers all bracing for the potential fallout.
