Please Note: This Article is 5 years old. This increases the likelihood that some or all of it's content is now outdated.

As I write this piece we are just one week away from knowing the result of the general election, which, depending on which party gets a majority, and which combination of parties gain the balance of power, has the potential to have a profound effect on the Private Rented Sector (PRS) in England.

Whilst we can discount some of the wilder suggestions coming from the fringe parties such as the Greens, there is no doubt the proposals coming from Labour, whilst at first sight less onerous than Labour in the past, undoubtedly do pose a serious threat to the private landlord.

The Labour Party has now released more detail on their housing market policies they say are intended to address the supply crisis and pressures on the private rented sector (PRS). Ed Miliband confirmed their intention to introduce the following measures pretty quickly following the first Queen’s speech, if the Party is elected in next week’s polls:

  • to cap rent increases at the rate of inflation (CPI) over a proposed new three-year default tenancy, in an attempt to ease pressures on prices. Tenants will have a legal right to stay for three years but will also have the right to leave at short notice
  • to introduce a legal requirement for landlords to disclose the rent that was charged to previous tenants when re-letting property, in an attempt to enable tenants to better negotiate rents
  • to introduce a national register of all landlords
  • to restrict tax reliefs for landlords whose properties fall below ‘basic’ standards, to address rogue landlords and deter the very worst from the market.

Some of these proposals have been greeted with dismay by landlords and landlord bodies, but Labour shadow housing minister Emma Reynolds tries to justify her claims that capping rents and reforming the private rental sector would provide security and bring “piece of mind” to tenants and “chase the bad landlords out of the market… This is not an attack on landlords. There are lots of great landlords out there. Good landlords have nothing to fear from our proposals.”, she has said.

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I think most private landlords would beg to differ on that last point.

Capping rent rises to the rate on inflation may not be a bad thing, as many landlords throughout the country don’t increase rents during tenancies when they have a good tenant. In fact it will work in some landlords’ favour as it will justify raising rents in line with inflation if every landlord is doing it – tenants could well come off worse.

Three year tenancies are much less welcome and would almost certainly deter some people from letting out their properties when they need to do so short term. It will remove flexibility from the rental market and result in even more housing shortages.

Taken as a whole, and when added to the measures introduced recently in the Deregulation Act 2015, which will make it more difficult to evict bad tenants, the proposals will inevitably lead to more not less pressure on housing; more cost and bureaucracy for government, and eventually higher rents for tenants, the very things the proposed legislation is intended to prevent.

These are damaging proposals which will affect both landlords and tenants. Parliamentary candidates should know the strength of feeling about them in the landlord and agent community, so I would urge everyone reading this to make their voices heard.

Both the National Landlord Association (NLA) and the Residential Landlords Association (RLA) have designed web pages so you can easily and effectively lobby key decision makers on these important issues affecting the Private Rented Sector (PRS).

RLA – www.rla.org.uk/general-election-2015

NLA – www.landlords.org.uk/nlalobby

Tom Entwistle, Editor.

Please Note: This Article is 5 years old. This increases the likelihood that some or all of it's content is now outdated.
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3 COMMENTS

  1. I Let my home of some 20 years out to an associate of my \’mortgage adviser\’ after moving to a property with more space. It has been a nightmare with bounced cheques false promises of payment etc. fortunately my mortgage adviser, whom I have known for over seven years as we had offices in the same building, signed as garentor for his \’colleague\’ who was returning from overseas. In reality this just meant that he backed his colleague up when i gave notice for him to hand possession back ( as the rent was some 6 months late) on every visit we made to court. It took 6 months to get possession back ( during which they paid no rent) and I am still waiting for payment from the garentor who assured the court in December the would be making payment in three installments to be completed by mid February!

    One hears of these stories – in my case it\’s turned out to be a true nightmare. I was only trying to help by providing somewhere for them to live whilst they got their transition back to the UK sorted out!

    If anything it\’s the landlord who needs more protection from tenants that take the biscuit like this.

    I think I\’ll be selling up once the repairs have been completed.

  2. For goodness sake. I see nothing in these proposals to worry decent landlords. Minimum standards before tax reliefs – are you saying that landlords who provide poor qualty housing should be subsidised from general taxation?
    Three year tenancies – well provided that the tenant has to wait for a year before giving notice I have no problem with that either. Inflation increases only for three years – seems fair to me for both parties.
    The devil will be in the detail but if these policies drive out the worst providers then that\’s fine by me.

  3. ken, the problem here is I the end it drives the good landlords out because the bad ones just ignore the rules and more often than not get away with it because the authorities are so inadequate at enforcement. And by the way, I think the tenant will be able to leave after 6 months
    Landlords like David Rix commenting above just get sick of the problems with letting property and fighting silly bureaucracy, the just pack up and leave.
    Yes bad landlords should be driven out. But Like most Labour proposals the idea of reducing tax relief for poor conditions is just unworkable in practice.
    Local authorities cannot enforce the rules against poor conditions, overcrouding and beds in sheds as it is, how on earth do you think they could actually identify all properties in their areas and then liaise with the \”highly efficient\” HMRC to make sure the relief is withheld. Then how and when is it reinstated? Come on Ken, this is labour cloud cuckoo land – most of them would struggle to run a chip shop, let alone run a country.
    It would be far better to put the resources into inspecting all rental properties in and area and condemn the bad ones – how difficult would that be.
    Then what happens, the tenants from these properties are evicted and it\’s the local authority\’s problem to rehouse, no council housing so back to private landlords.
    It\’s a vicious circle and a problem not easily solves.
    At the very dregs of the letting market some are housing tenants that nobody wants.

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