Labour Manifesto: For the landlords?

manifesto coverIn a landlords world, when something starts to leak it usually becomes very costly; roofs, washing machines, shower-trays all start with a drip and result in damage.

As such when we reported that the Labour Party manifesto had been leaked last week there were very real concerns that we were about to see a highly interventionist, potentially very costly set of policies courtesy of Mr Corbyn’s team.

The leaked draft suggested:

  • Rent controls – Capping rents at inflation
  • Longer tenancies – Three-year tenancies will be made “the norm”
  • Devolved power – More power of the PRS given to the Mayor of London due to “the particular pressures in London”
  • Minimum standards – A new legal minimum standard to ensure properties are ‘fit for human habitation’
  • New consumer rights for tenants – Empower tenants to take action against landlords who rent out sub-standard properties

Whereas the official manifesto said:

  • Labour will “Improve” upon existing energy efficiency regulations which will already prohibit landlords granting a new or renewed tenancy for properties below an EPC rating of E from April 2018
  • Labour will seek to make three-year tenancies “the norm”, with an inflation cap on rent rises
  • The Mayor of London will be granted extra powers to give London renters additional security
  • Labour will legislate to ban letting agency fees for tenants
  • Labour will “empower tenants” by giving renters new consumer rights:
    • Minimum standards – A new legal minimum standard to ensure properties are ‘fit for human habitation
    • Empower tenants to take action if their rented homes are sub-standard.

All in all it’s not likely to be popular with many landlords, but neither does it look like the death knell for the private rented sector.

This may count as blasphemy in some quarters, but frankly if you gave me a straight choice between Mr Osborne’s s24 debacle and the prospect of some new consumer rights for tenants, I know which one i’d be more afraid of. Not that such a choice is on offer from any party at this election.

But what does ‘make three-year tenancies the norm’ mean? 

There lies the rub. If this means maintain the status quo, but encourage landlords and tenants to agree longer tenancies – then so be it. If on the other hand the plan is to pick up the baton left by Ed Miliband, who favoured replacing the AST with a new minimum three year term for all, or possibly go even further – then all bets are off.

And the rest?

Aside from the PRS specific policies, there are a few proposals to take note of, some of which are very welcome.

Firstly, Labour would exclude small businesses with a turnover below £85k from Making Tax Digital, the NLA has called for just this change for some time.

Secondly, the Party would reintroduce the Landlords Energy Savings Allowance (LESA) to help incentivise efficiency improvements. This would be very welcome, although the impact will depend on what happens to the PRS regulations and minimum standards.

More negatively, the Opposition is wedded to increasing Corporation Tax rates to 26 per cent and 21 per cent for small businesses (profits below £300,000).

Overall, there are some good and bad points for landlords in the manifesto but it definitely could have been worse.

Of course the only manifesto that counts is the one of the party that wins on 8 June.

For more information visit the NLA website 

3 thoughts on “Labour Manifesto: For the landlords?

  1. I suggest the NLA lobby the main parties, and Labour in particular, to add obligations on tenants to take care of properties to correspond with the ever increasing obligations on landlords. There are, unfortunately, many rogue tenants not just some landlords, and these tenants damage property deliberately and fail to pay the rent, so obligations should also be placed on tenants to keep their side of the bargain. It is very expensive and ultimately unsatisfactory when landlords have to resort to legal action for redress so it should be made easier and costs should be also applied to delinquent and defaulting tenants.

  2. I am quite happy to keep my good tenants for more than three years but unless the process for removing bad, non paying tenants is speeded up dramatically I can see a lot of landlords throwing in the towel. I have been a landlady for many years and one of the main reasons more people became landlords was the introduction of 6 month AST’s. Before that I only let to students in the knowledge that the would move on, eventually. Why should someone let their very expensive asset to a complete stranger knowing that it would be at least 3 years before you could ask them to leave. I won’t.

  3. I have greater concerns regarding the proposed Land Tax which Labour wish to replace Council Tax with.
    The manifesto currently suggests that homeowners and landlords only would be charged. Tenants would be exempt from Land Tax, Landlords would be responsible for the charge.
    Along with Section 24 and the proposed cap on rent increases it doesn’t bode well.
    I fear it may lead to many part time and accidental landlords selling up. An influx of properties into the housing market will result in lower property values.

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