NRLA calls for tax overhaul to encourage investment in PRS
12:02 AM, 26th October 2026, 2 hours ago
A landlord group is urging the Chancellor to boost rental supply in the upcoming Autumn Budget.
The National Residential Landlords Association (NRLA) is warning that the tax system needs a “fundamental overhaul” to encourage long-term investment in the private rented sector.
The call comes ahead of the Autumn Budget this Wednesday, amid mounting speculation over whether landlords will face tax hikes.
Tax system needs a fundamental overhaul
Ben Beadle, chief executive of the NRLA, said: “As a former Housing Minister, the Chancellor knows full well the pressures facing tenants and the private rented sector. Wednesday’s Budget gives him the chance to tackle these issues head-on and improve affordability and choice for renters.
“The Budget needs to do more to boost the supply of homes to rent to give tenants greater choice about where they live. With an average of ten people chasing every available rental property, the tax system needs a fundamental overhaul to encourage long-term investment in vital new rental housing stock.
“Alongside this, housing benefit rates need to change so they reflect rental prices as they are today. The Resolution Foundation has found that the gap between Local Housing Allowance rates and the lowest 30 per cent of rents is now at a record high. Unfreezing rates would provide vital support to more than 900,000 households, and this analysis shows that the overwhelming benefit would be felt by tenants rather than being absorbed through higher rents.
“The Chancellor also needs to develop a bespoke package of support to help responsible landlords make the investments needed to meet the government’s energy efficiency targets. With an October 2030 deadline, time is running out to ensure the necessary support is in place and deliver the improvements to rented homes we all want to see.”
Reform Capital Gains Tax
Ahead of the Budget, speculation is mounting over whether the Chancellor could increase Capital Gains Tax (CGT) to 45%, raising concerns about the impact on landlords.
CGT is paid on the profit made when an asset, such as a property, is sold. For residential property, the current rates are 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers.
Research by The Letting Partnership reveals that the average UK property increased in value by £74,442 over the past decade, rising from £198,169 in July 2016 to £272,611 in July 2026.
Based on the current 24% rate, this increase in value would result in an illustrative CGT bill of £17,866. If the rate rose to 40%, the bill could climb to £29,777 – an additional £11,911.
Rather than simply increasing the tax burden, the NRLA is urging the Chancellor to reform Capital Gains Tax.
Its proposals include adjusting a property’s purchase price and qualifying capital expenditure for inflation before calculating the taxable gain, as well as introducing relief based on how long a property has been owned and used to provide rental accommodation.
Properties bought and sold speculatively over short periods would not qualify for relief.
