In 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