The National Residential Landlords Association (NRLA) has urged the Chancellor to use Wednesday’s Budget to increase rental supply and improve affordability for tenants. It will be the chancellor’s first Budget.
Tax overhaul to lift rental supply
“As a former Housing Minister, the Chancellor knows full well the pressures facing tenants and the private rented sector,” said Ben Beadle, chief executive of the NRLA. “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.”
Rightmove data show the average rental home received 10 enquiries, compared with 5 before the pandemic.
The housing benefit gap
Resolution Foundation analysis found the shortfall between Local Housing Allowance (LHA) rates and the 30th percentile of local rents has reached a record 23.3%. That equals an affordability gap of £170 a month for a typical family in a two-bedroom home.
“Without Government action, these shortfalls are set to rise further and reach an estimated 32 per cent by 2029-30, equivalent to £235 a month for a typical family in a two-bedroom home, way beyond the point at which previous governments have intervened,” the foundation noted.
“Instead of leaving low-income households to plug this growing affordability gap, the Government should use next week’s Budget to recommit to the annual re-linking of LHA support to the 30th percentile of local rent.
"Restoring the link between local rents and support would help over 900,000 households at a cost of £2.3 billion by the end of the Parliament and can be funded, if necessary, within the Universal Credit budget by increasing the taper rate.
“Previous Resolution Foundation research has shown that when the Government last raised LHA support, it was private tenants, not landlords, who overwhelmingly reaped the benefits – with just 10p in every pound of extra LHA support showing up as higher rents at the bottom of the market.
“The same research found that in 2024-25, over half (58 per cent) of working-age adults in private renting families on housing support were in material deprivation, with one-in-five unable to afford to keep their homes warm – the Foundation notes that any savings on rent would likely be used to relieve other essential needs.”
The government has said it wants all private rented properties to meet an Energy Performance Certificate standard of at least C by October 2030.
