Labour warned taxing landlords' rental income through National Insurance would deepen an already hostile environment for property investors
Landlords are already being taxed differently to other self-employed income earners – and a new proposal to extend National Insurance contributions (NICs) to rental income would make that disparity even worse.
Jeni Browne, sales and marketing director at Mortgage Finance Brokers, told Mortgage Introducer the private rental sector is being talked down at a time when committed landlords are still actively investing.
The warning comes in response to a report published by the New Economics Foundation (NEF), a think tank with close ties to the Labour Party, urging the government to extend NICs to rental income. The NEF estimated the move could raise £3.2 billion, but critics warn the cost would be passed straight to tenants through higher rents.
Browne believes the proposal is fundamentally inequitable. "It feels like landlords are being asked to pay more tax on self-employed income, which other self-employed incomes are not being taxed on," she said. "It feels a little bit unfair. It's just another thing where the revenue is taking rental income as a very specific type of income and taxing it differently. I actually think it's really unfair."
Rates holding the market back
Browne said elevated mortgage rates remain the single biggest drag on buy-to-let activity. "I think what's really causing a drop at the moment is simply that people aren't transacting because of the elevated mortgage prices. A lot of people are thinking this is a temporary snap and things will improve."
Her assessment aligns with recent lending data. Paragon Banking Group reported a 4.7% decline in new buy-to-let mortgage lending to £774 million in the first half of its financial year, attributing the fall to a smaller opening pipeline following the November budget. Although professional landlords are still selectively acquiring where they see value, broader transaction volumes remain subdued.
Browne's advice to clients is to act rather than wait. "Apply for a mortgage now and if the lender drops their rates at any time before completion, you can simply move on to a new lower rate," she said. "If it goes up, you're protected, but if it goes down, you stand to benefit." At Mortgage Finance Brokers, Browne revealed that extends to post-application monitoring. "We are reviewing on a weekly basis whether that lender has dropped their rates down, so we can bring the pricing down for a client.”
Limited companies become the norm
One structural shift that has gathered momentum is the use of limited company vehicles for buy-to-let acquisitions. Paragon's data showed that 43% of all mortgaged buy-to-let purchases in Britain during 2025 were made through limited companies, up from 35% in 2024 and less than 8% in 2018.
Browne said this trend has been building since the introduction of Section 24, and that wider product availability from mainstream lenders has made the structure far more accessible. "As more investors become aware of being able to use a limited company, there's greater availability from more mainstream providers. It's just becoming essentially the new way that people own properties from a tax efficiency perspective."
Contrary to some commentary, Browne argued the market has actually become simpler for brokers. "Before Section 24, there was very little choice and only really specialist lenders offered them, but now there's so much more choice."
The case for optimism
Despite the headwinds, Browne pushed back against the narrative the buy-to-let market is in terminal decline. "There's a lot of talking the buy-to-let market down at the moment, and lots of reporting of landlords mass exiting the market," she said. "But we need to recognise that the private rental sector is a really key part of the UK housing stock. Sure, some landlords are leaving, but equally we have landlords who are still investing and buying more property."
For Browne, the priority is ensuring landlords' contribution to housing supply is not lost in the political debate. "Rather than thinking that the buy-to-let market is dead and writing it off, let's be thinking about those people who are still very committed to being landlords and driving the sector forwards, providing a very important type of housing for UK residents."
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