Perhaps I should be grateful for The Labour Party Manifesto policy offering on the private rental sector, after all there was virtually nothing in the previous four manifestos.
This is it, lifted from the manifesto; a handful of lines, it took me a while to find it.
“For the 11 million people who rent privately, we will legislate to make three-year tenancies the norm, with a ceiling on excessive rent rises. A ban on unfair letting agent fees will save renters over £600. We will drive standards up by creating a national register of private landlords.”
So dissecting the above…
- The three-year tenancy idea is good and long overdue but how will it work in practice. Many owners come into the market for short term profit (riding a boom) and then cash in; will these units be sold with sitting tenants or will the 3 year agreement become void.
There is nothing on front loading Capital Gains Tax to encourage landlords to hold for the long term.
- The ceiling on excessive rent rises. Not much detail here but it is better than a crude cap. It is a nod towards the system in many parts of Germany. Will it be based on a database of rents in each region, as in Germany, that takes into account regional variations or just linked to inflation?
- A ban on unfair letting agency fees; on the face of it very necessary. But will it reflect the fact that letting agencies do provide a service to the tenant, not just the landlord. Competition between tenants for decent scarce property is fierce and it is normal practice for agents to take holding deposits soon after viewing, will this continue.
- A national register is necessary but will it be compulsory or voluntary?
The stuff Labour left out
- Discrimination against people on out of work and in work benefits; the big new players are buy-to-let investors (BTL) taking advantage of cheap money loans that often comes with restrictions on who the landlord can let to. Adverts on sites such as Zoopla, for example, contain warnings along the lines of ‘No DSS’ (sic) or ‘No Housing Benefit’.
Does Labour have plans to ban this discrimination?
- Currently there are some 800,000 homes left empty; the standard ‘flight mode’ of landlords nervous about what they see as hostile policy is to leave property empty until the time is right for cashing in on capital value. Nothing here from Labour; why not repossess the worst offenders and bring under social control and discourage the rest with ‘planning consents’ for change of use from ‘a potential home’ to ‘empty’.
- Making a home a home. Tenants often face stringent conditions on whether pets are allowed and the degree of personalisation, as in decorating, allowed. It is not uncommon in Germany for the first tenant to put in the kitchen and bathroom, but this is only practical in a country where long (greater than 10 years) lets are common. Any legislation needs to reflect that a let property is the home of the tenant and the asset of the landlord.
- A substantial amount of private rental stock is just old with all the energy efficiency issues that come with that. It would make sense to incentivise landlords by offering tax breaks. For example, allowing property costs to be offset against other income such as salaries or dividends.
So a start from Labour but nothing more; vague and lacking detail. In all it comes across as an afterthought or sop embedded near the bottom of the manifesto section on housing most of which continues the national obsession with home ownership.