Generation Rent has urged Chancellor Rachel Reeves to tax landlords harder in her first Budget by making them pay NI contributions.

While it believes she should uprate Local Housing Allowance, the campaigning group says these benefits will simply go to landlords, who are “very often providing substandard homes that make tenants ill”.

“Landlords who don’t have a mortgage pay a lower tax rate on their rental profits than someone in the same tax bracket who only has an income from their job,” it explains. “This is because wages are subject to National Insurance, but rental profits are not. Requiring landlords to pay NI contributions would restore some balance with workers.”

Generation Rent reckons that profits from the sale of assets should also be taxed at least the same rate as income from work, with the capital gains tax rate on property increasing to match income tax rates. The Chancellor should also replace council tax and stamp duty with an annual property tax based on a proportion of the property’s value, to stop disadvantaging people on lower incomes.

Eviction

Whatever happens, landlords will continue to sell up because of higher interest rates, so instead of eviction it would be much better for the housing market if the tenant had the option to buy it or to nominate another landlord, such as the council or a co-operative, the group adds.

The government should also consider policies to encourage the use of concessionary mortgages to help tenants buy out their landlords, particularly if the need for a deposit could be reduced through a discount on the sale price.

Among its other suggestions for reform are giving English councils more powers to set council tax on second homes and where landlords are investing their own money, they should be able to deduct the cost of energy efficiency measures from their taxable income.