Balancing the books, ignoring the rent: The Budget that risks pushing Britain’s property market over the edge

Rents are climbing at the fastest pace we’ve seen in years, with many spending 40-60% of their income on rent. Wages aren’t keeping up - pushing affordability to breaking point.

Landlords are selling up and exiting the market. More supply is needed. And yet, as we head into this Budget, the Government looks ready to talk about everything except the crisis that underpins the entire economy.

With talk of a potential ‘mansion tax’ dominating headlines today, it’s hard to ignore how far the political debate has drifted from the real crisis facing millions of renters right now.

If ministers want stability, they simply can't ignore the chaos unfolding in the rental market.

The Bank of England may have held the base rate at 4%, but renters aren’t seeing stability today or in the future. They’re seeing pressure. And if the Budget doesn’t confront that head-on, we’re only storing up more pain for later.

1: Do the Budget’s housing measures actually help private renters, or are they just easy political wins?

At present, the measures expected in the Budget appear unlikely to shift the dial for private renters in any meaningful way. Much of the discussion centres on planning reform, future supply pipelines and incremental adjustments to existing schemes, all are politically safe, longer-term levers.

The problem is that renters’ challenges are not distant or speculative; they are immediate and severe. Rental inflation is running well ahead of wage growth, vacancy rates remain historically low, and the departure of smaller landlords continues to constrict supply.

For renters facing double-digit annual rent increases in several regions, policies with a five-year horizon offer little comfort. The question for policymakers is whether they are prepared to introduce interventions that address affordability now (measures that inevitably come with political risk and fiscal cost) or whether they will continue to prioritise announcements that sound reformist without affecting the market in the short term.

As it stands, the emphasis is falling firmly on the latter.

2. With rents rising faster than wages in many regions, how does the government justify prioritising other fiscal goals over secure, affordable housing?

Successive governments have treated housing primarily as a political and fiscal balancing act, but increasingly it is an economic one. If housing costs continue to absorb a disproportionate share of household income, the impact extends far beyond renters’ budgets: consumer spending weakens, workforce mobility declines and employers struggle to recruit for roles that require physical presence.

In many major urban centres, rental affordability ratios have reached levels that would be considered unsustainable in comparable international markets. This raises an unavoidable question: how can an economy achieve productivity gains when large segments of its workforce cannot afford to live near the jobs that drive those gains?

While fiscal prudence is understandable, the government risks underestimating the extent to which unaffordable housing acts as a drag on economic performance. Treating housing as a social concern rather than an economic priority is increasingly at odds with the evidence. Stability cannot be built on a foundation that is structurally unaffordable.

3. Are younger workers and low to middle earners being left out entirely, and what would meaningful support for renters realistically look like in this economic climate?

Successive governments have treated housing primarily as a political and fiscal balancing act, but increasingly it is an economic one. When housing costs absorb a disproportionate share of income, the consequences extend far beyond renters’ budgets:

consumer spending weakens

workforce mobility declines

employers struggle to recruit staff

productivity stagnates

In many UK cities, rental affordability ratios have reached levels that would be considered unsustainable in comparable international markets. This poses a simple question: how can an economy achieve productivity gains when large parts of its workforce cannot afford to live near the jobs that drive those gains?

Fiscal prudence has its place, but treating housing affordability as a peripheral social issue. rather than a core economic priority, is increasingly at odds with reality. Stability cannot be built on a foundation that is structurally unaffordable.

Now what?

There are three areas where meaningful support is urgently needed:

• Predictable, rent-increase frameworks to provide stability for tenants and responsible landlords
• Clear incentives for large-scale build-to-rent and affordable housing, backed by regulatory certainty
• Modernised mortgage criteria and realistic deposit support, acknowledging that traditional pathways into homeownership no longer reflect the economy younger workers live in

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Michelle Niziol is a serial entrepreneur, speaker, and mentor with over two decades of experience building and scaling successful businesses across property, finance, and investment.

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