Many people see political party manifestos as a ‘wish list’ published just before elections to grab votes but a look inside may provide an insight to what the main political parties are hoping to achieve after the next election:
Conservatives
- Abolish ‘no fault’ evictions to protect tenants from revenge evictions. {This is reference to the Section 21 Notice Requiring Possession, and this is certain to happen regardless of which party gets elected. The ability for landlords to easily repossess their property when they wanted has been a significant factor in the growth of the rental sector and remains a significant factor for anyone considering becoming a landlord. Anything that obstructs landlords getting possession of their property when they want will have a negative effect on the sector as landlords leave and new landlords do not enter. This change will need to be carefully considered in unpicking complex legislation and the threat it poses to the stability of the rental market will need to be thought through. The only positives from this are the next item on the Conservatives wish list (below) which suggests new (hopefully) mandatory grounds for landlords who want to repossess their property. This change also needs to be considered in the context that more tenancies are ended by tenants than by landlords. Where this may become a real issue is where a landlord has a difficult tenant – difficult to communicate with, annoys neighbours, pays rent late, causes excessive wear and tear, regularly complains or raises unnecessary repair requests. It is unlikely having a difficult tenant will be a mandatory ground for repossession so the only option open to a landlord in this situation (post change) might be to put the property on the market for sale using a (new) mandatory ground for possession but therein lies another can of worms – how easy would it be to conduct viewings with a difficult tenant and who, how and when would the sale be monitored if/after the tenant had left? And having to sell a property (and removing a property from the rental market) because you have a difficult tenant is an extreme measure – the thought of which deter new landlords entering the sector.}
- Strengthen landlords’ rights of possession. {Suggests new mandatory grounds for possession? Landlords already have adequate rights of possession and legal processes exist to support this. The big problem that needs addressing is the bottleneck in the legal system. The median time for a landlord to get possession of a property from serving notice to repossession is 28.1 weeks – 6 1/2 months! Anything the next government can do to expedite repossession would be welcomed by landlords.}
- Only require one ‘lifetime’ deposit which moves with the tenant. {Not sure how this would work in practice where the deposit could be different for consecutive tenancies or where the deposit is the subject of a compensation claim long after the end of the first tenancy.}
- {article update} In an attempt to grab votes the Conservative party appears to have made a U-turn on rent controls following comments made to a newspaper by the Housing Secretary. The Housing Secretary, Robert Jenrick revealed this week in an interview with i newspaper that the Conservatives will now consider limited controls on rent rises. This is contrary to what he said at the Parliamentary housing select committee in early November. Before the select committee, Mr Jenrick revealed that he was ‘not in favour of rent controls’.
Labour
- Pay the housing element of benefits directly to landlords to make it easier for people to manage their living costs. {This is welcome news for landlords and for tenants who struggle managing finances. Currently a landlord can request direct payment of housing benefit/local housing allowance (LHA) if the tenant is 8 weeks in arrears but it is a convoluted process during which time the landlord is not receiving rent.}
- Give councils the powers and funding to buy back homes (ex-Council houses) from private landlords. {This is probably something the UK government could not afford to do. The Labour Partywere the first to propose the idea of the right of tenants to own the house they live in, in 1959. The introduction of Right to Buy in the Housing Act 1980 opened the floodgates and by 1987 more than 1,000,000 council houses in the UK had been sold to their tenants. Many ex council houses have since been sold many times over at increasing multiples of the original discounted prices paid. The task of identifying every property in the UK that was ever council owned that is now let privately is huge. The compulsory purchase of all those properties identified would be legally and financially challenging. Detail of how this will be funded and who it will apply to has changed over the last 4 years and varied depending who you listen to. Shadow Chancellor John McDonnell recently wrote in the Financial Times, “There’s a large number of individuals or families who have bought another property as an asset for the future and we wouldn’t want to endanger that”. Yet, even this somewhat watered-down account still creates threats to the private rental sector and Glastonbury’s overall stock of private rented homes. The shift appears to be aimed at pacifying middle England small time landlords who are probably swing voters with smaller property investments and instead, Labour’s focus is on the larger scale buy to let investors. To target these larger scale landlords, who would unquestionably leave the property market in their hordes if their buy to let investments could be so easily destabilised. There would be mass sell offs before the legislation became law, thus making the tenants homeless (and who would house them??) ..and even if that didn’t happen, it would be very damaging and someone (probably landlords) would have to stump up the estimated £48.54bn national bill.}
- Introduce rent controls to stop runaway rents by capping them with inflation. {Linking rent rises to inflation will be good news for landlords and bad news for tenants. Landlords rarely increase rents mid-tenancy. Legislation to make it easier for landlords to raise rents and make rent rises ‘a given’ will likely make rent rises an accepted annual event. The rate of inflation most commonly exceeds the rate of Section 13 rent rises so this idea will likely fuel rent inflation meaning tenants will potentially be paying higher rents under this new regime – good news for landlords, bad news for tenants. This may not always be good news for landlords when rising interest rates mean landlords are paying higher mortgage payments.}
- Give cities powers to cap rents further. {There is a correlation between property prices (paid) and interest rates and market rents. Any caps imposed by local authorities would need to take this into account if they want to avoid making it no longer financially viable for a landlord to let property in that area.}
- Introduce open-ended tenancies to give tenants the security they need and stop unfair, ‘no fault’ evictions. {Giving open-ended tenancies will not stop unfair evictions which are adequately governed by existing legislation such as the Protection from Eviction Act 1977.}
- Introduce new, binding minimum standards enforced through nationwide licensing and tougher sanctions for landlords who flout the rules. {Adequate legislated standards already exist. What is missing is enforcement of those standards. Many landlords are not aware of the existing standards, have no interest in finding out what the standards are, or simply avoid compliance to avoid any expense compliance may incur. Simply rolling out a licensing scheme will not bring these ‘rogue’ landlords on board – they will not register for the scheme for the same reasons for their non-compliance above. For good landlords, this will be another piece of bureaucracy and additional expense that may affect the viability of their investment.}
- Fund new tenants’ unions in every part of the country – to allow tenants to organise and defend their rights. {Organisations such as Shelter already provide good support for tenants and deposit protection schemes provide tenants with legally binding support when a landlord makes a claim against a Tenancy Deposit. Unions in every part of the country to (legally?) defend tenants will be a huge undertaking and it raises the question of who will fund these unions – tenants, landlords or taxpayers?}
- Get rid of the rules that require landlords to check people’s immigration status. {Good news for landlords and tenants and especially good news for tenants who have no right to live in this country.}
- Do not allow landlords to exclude people on housing benefit. {This ‘landlord’ exclusion is often rooted in conditions of the landlord’s mortgage or insurance policy. It would fairer and be more effective if the government dealt with the mortgage companies and insurance companies rather than place landlords in this difficult situation.}
- Give councils new powers to regulate short-term lets through companies such as Airbnb. {Giving Councils new powers is one thing but without the resources to exercise even existing powers will be a wasteful piece of bureaucracy.}
Liberal Democrats
- Establish a new Help to Rent scheme to provide government-backed tenancy deposit loans for all first-time renters under 30 to help young people into the rental market. {I could write a book on this idea – but I won’t! Given the nuances of contract law and the laws governing tenancy deposits it would be nigh on impossible, and I do not use that word lightly, to implement this idea in practice. Having a government organisation involved as a third party in tenancy deposits would add to the complexity in what is already a minefield for landlords. If this idea were in some way shoe-horned into legislation it would cause widespread discrimination against tenants who were using such a scheme. Tenancy deposits are capped at a maximum 5 weeks rent for most rents in this area. If a tenant cannot raise the funds for a tenancy deposit, they are unlikely to be able to afford the rent. Finally, if the average age of first-time buyers is more than 30 why does this idea discriminate against people older than 30 – seems somewhat arbitrary.}
- Promote tenancies of 3 years or more to give tenants security. {In our experience, very few tenants want to commit to a tenancy this long. Most tenants want a lesser commitment to meet their short-term needs only which may be centred around factors like schooling, employment, future housing plans, anticipated size of family or care of an elderly relative. Exceptions to this are where a tenant is retired or a tenant who is finding it hard to find a landlord willing to take them on as tenants e.g. Tenant has bad record as a tenant – perhaps accumulated rent arrears or damaged property.}
- Promote inflation-linked annual rent increases built in to tenancies to limit rent hikes. {As above.}
- Introduce mandatory licensing to improve protection against rogue landlords. {Not sure that introducing mandatory licensing would improve protection against rogue landlords and as above, introducing a licensing scheme is one thing, ensuring rogue landlords register is another – who, how and when would local authorities ensure ‘all’ landlords are registered as many landlords fly under the radar.}
Conclusion
It is evident that these wish lists are produced by people who are not experts in the industry and have never worked in the industry.
There is not much to cheer about for Glastonbury landlords in the manifestos, but you can find some comfort from the fact that most of these ideas will never see the light of day. The only positive ideas are:
- Strengthen landlords’ rights of possession (Conservatives)
- Pay the housing element of benefits directly to landlords to make it easier for people to manage their living cost (Labour)
- Get rid of the rules that require landlords to check people’s immigration status (Labour)
The industry is already heavily regulated with thousands of pieces of law governing what landlords and tenants can and cannot do. If politicians want to improve the sector here is what the next government should focus on:
- Enforcement of existing law – such as more resources for Trading Standards and Environmental Health Compliance teams
- Better resourced courts – to expedite existing court process
- Build more housing of all tenures so that people do not have to move as often and have more choice – we are creating households at a faster rate than housing at prices people cannot afford to buy
Founder of Jungle Property the multi award-winning letting agent based in Glastonbury, Somerset. I am passionate about property and Glastonbury and about providing the very best advice to anyone who wants the best return on a buy-to-let property investment. For an open and brutally honest opinion on anything in the Glastonbury property market please contact me via tom.morgan@jungleproperty.co.uk
