The National Residential Landlords Association has called on Chancellor John Healey to use his first Budget on Wednesday 28 October to overhaul the tax treatment of rented housing, unfreeze housing benefit rates and set out support for energy efficiency upgrades. The intervention came as figures showed an average of 10 tenants chasing every available rental home while the gap between Local Housing Allowance and market rents reached a record high.
In a statement published on 26 October, the association said the tax system needs fundamental reform to encourage long-term investment in new rental stock. It pointed to fresh Resolution Foundation analysis showing the average shortfall between Local Housing Allowance rates and the lowest 30 percent of rents has reached 23.3 percent, equal to about £170 a month for a typical two-bedroom family home, with the gap on course to reach 32 percent or £235 a month by 2029-30 without action.
With the Budget less than a day away, the demands set up a direct test of whether the Treasury will use tax and benefit policy to ease pressure in a market where supply has failed to keep pace with demand. Ministers have so far held back from committing to relink housing support to rents, leaving landlords who let to benefit claimants exposed to a growing arrears risk.
Budget tax overhaul tops NRLA demands
Ben Beadle, chief executive of the National Residential Landlords Association, said the Chancellor knows the pressures facing tenants and the rented sector from his time as a former Housing Minister. “Wednesday’s Budget gives him the chance to tackle these issues head on and improve affordability and choice for renters,” he said.
“The Budget needs to do more to boost the supply of homes to rent to give tenants greater choice about where they live,” he said. “With an average of 10 people chasing every available rental property, the tax system needs a fundamental overhaul to encourage long-term investment in vital new rental housing stock.”
The call lands a day before the Chancellor delivers his inaugural Budget at lunchtime on Wednesday. Landlord groups have spent the run-up warning that the current tax burden is deterring investment at the same time as demand remains intense. Rightmove data cited by the association puts enquiries per available rental home at double the pre-pandemic level.
Local Housing Allowance freeze leaves £170 monthly gap
The sharpest figures in the association’s submission concern housing benefit. The Resolution Foundation found the shortfall between Local Housing Allowance rates and 30th-percentile rents is now at an all-time high, and warned it will keep widening without a decision in the Budget to relink support to local rents.
Previous research from the Foundation showed that when the Government last raised support, private tenants rather than landlords captured almost all of the benefit, with only about 10p in each extra pound showing up as higher rents at the bottom of the market. The association said restoring the link would help more than 900,000 households at a cost of £2.3 billion by the end of the Parliament, a sum it argued could sit within the Universal Credit budget.
The scale of the squeeze is underlined by Citizens Advice findings that 58 percent of tenants face a benefit shortfall, while housing benefit now covers just 1.9 percent of rentals on the open market. This follows Landlord Knowledge’s earlier reporting on the collapse in benefit coverage, which found only a fraction of listed homes remained affordable within Local Housing Allowance rates. The latest Foundation numbers suggest that trend has now reached its worst point on record.
Official backing for an unfreeze is also visible outside landlord circles. The Foundation noted that 58 percent of working-age adults in private renting families on housing support were in material deprivation in 2024-25, with one in five unable to afford to keep their homes warm. It argued any savings on rent would probably be used to meet other essential needs. Further detail is set out in the Resolution Foundation analysis of the record LHA gap, while the full landlord demands are published in the NRLA Budget submission statement.
EPC upgrade support urged before 2030 deadline
The association also pressed for a bespoke package of support to help landlords meet the Government’s plan for all private rented homes to reach Energy Performance Certificate band C by October 2030. With four years left on the clock, it warned time is running out to put funding and delivery routes in place.
Ministers have yet to confirm what financial help, if any, will accompany the target. Lenders have started to price green discounts into buy-to-let ranges, but upfront retrofit costs still fall on owners. A clear signal in the Budget on grants, tax relief or low-cost finance would give landlords room to plan works across tenancies rather than rushing near the deadline.
What this means for landlords
- If you let to tenants on benefits: A frozen Local Housing Allowance keeps widening the gap you must bridge through rents, references or arrears management. Watch the Budget for any relinking of rates to the 30th percentile.
- Watch for tax signals: Any overhaul of rental taxation could change the maths on incorporation, capital spending and portfolio growth. Avoid major restructuring until the Chancellor has spoken.
- Bottom line: Supply routes, benefit rates and EPC funding all hang on Wednesday’s statement. Landlords with upgrade or purchase plans should keep decisions flexible until the detail lands.
Editor’s view
The NRLA has picked the right eve-of-Budget ground. Ten enquiries per home and a record benefit gap are hard for the Treasury to dismiss as lobbying noise. The test is whether Wednesday brings funded measures or warm words. Landlords should hope for the former and plan for the latter.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 27 October 2026
Sources: NRLA, Resolution Foundation, Rightmove
Related reading: Citizens Advice finds 58% of tenants face benefit shortfall
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