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 This increases the likelihood that some or all of it's content is now outdated.

Landlords are concerned that Labour’s policies for the private rented sector repeated recently in a speech by Emma Reynolds MP will only make the situation worse for tenants.

The Residential Landlords Association says that proposals to bring in rent controls and enforce longer term tenancies will only deter investment in new rented housing at a time when more supply is desperately needed to meet the increasing demand.

In February 2010, the then Labour Government, published a consultation document entitled “Investment in the UK private rented sector.” This warned against rent controls.

The document further warned against long tenancies arguing for the need to maintain flexibility within the system. It explained:

- Advertisement -

“The PRS allows households to move easily both within and between regions, leading to a more efficient allocation of labour and skills. The corollary of this is that if the supply of PRS tenancies were to become limited, those needing uncertain or short periods of accommodation in a particular area would find themselves severely disadvantaged.”

Commenting on the Shadow Housing Minister’s speech, Chris Town, Vice Chairman of the Residential Landlords Association said:

“Sadly, once again Labour are playing to people’s fears and failing to tell people that the average length of residence for tenants in the private rented sector is now 3.8 years and where tenancies are ended, just 9% of them are ended by the landlord.

“It is discouraging that the Opposition are failing also to recognise that official Office for National Statistics data shows that rents across the country are falling in real terms.

“What the sector needs is a concerted effort to boost the supply of homes to rent by recognising renting a property as a trading activity within the taxation system and making it easier for the majority of landlords who are individuals, to develop on small plots of unused public sector land.

“Far from securing the homes we need, Labour’s policies would be highly damaging, further reducing the choice for tenants.”

The RLA represents over 20,000 private sector residential landlords in England and Wales.

Details of the Intermediary Mortgage Lenders Association research on growth in the private rented sector can be found at http://www.imla.org.uk/news/post.php?s=2014-05-15-over-half-of-uk-homes-to-be-rented-by-2032 . This concluded that 35% of UK households will be renting privately by 2032.

HM Treasury’s consultation on investment in the private rented sector, published in February 2010 can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/81460/consult_investment_ukprivaterentedsector.pdf . This warned against rent controls, arguing:

“The post 1918 period was characterised by a long-run decline in the private rented sector
(PRS), although even as late as 1939 over half of households in the UK were housed in the sector, but by 1991 this figure stood at less than 9 per cent. There were a number of reasons for this.

“A key factor behind the decline in the PRS was the introduction of rent controls during the
First World War, and these became more extensive over time. Artificially low rents reduced investment in the sector, contributing to a tenure shift to owner-occupation and lower maintenance standards in the stock that remained.”

The document further warned against long tenancies, arguing for the need to maintain flexibility within the system. It explained:

“For those that need it, the PRS offers unparalleled mobility. Many industries rely on short-term or temporary workers for whom owner-occupation, with its significant transaction costs and lengthy processes, would be expensive and impractical.

“The PRS allows households to move easily both within and between regions, leading to a more efficient allocation of labour and skills. The corollary of this is that if the supply of PRS tenancies were to become limited, those needing uncertain or short periods of accommodation in a particular area would find themselves severely disadvantaged.”

The English Housing Survey for 2012-13 can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284648/English_Housing_Survey_Headline_Report_2012-13.pdf . Page 22 reads:

“In 2012-13, the average (mean) length of residence for owner occupiers was 17.3 years, for social renters it was 11.3 years, while for private renters the average length of residence was 3.8 years.”

The latest edition of the Office for National Statistics’ Index of Private Housing Rental Prices was published on 25th July 2014 and can be accessed at http://www.ons.gov.uk/ons/dcp171778_372229.pdf. Details can be found below:

NLA Table

Please Note: This Article is 5 years old. This increases the likelihood that some or all of it's content is now outdated.
©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.

LEAVE A REPLY

Please enter your comment!
Please enter your name here