Labour's anti-business plans could lead to industry contraction for the PRS and make thousands of...
Labour’s anti-business plans could lead to industry contraction for the PRS and make thousands of tenants homeless
It is possible that flawed proposals in Labour’s manifesto are likely to result in industry contraction for the private rental sector (PRS) and could ultimately make thousands of tenants homeless.
There has been increasing press coverage about Labour’s plans to outlaw tenant fees and introduce other flawed policies such as rental caps and long-term rental agreements. The Labour party is blatantly targeting the PRS to try and win votes from the UK’s nine million renters. However their proposals are not only anti-letting agents, they are also anti-business and will in fact harm tenants - the very people that Labour say they want to help.
The most recent figures released by the Office of National Statistics estimates that for the year ending September 2014 net long-term migration to the UK was 298,000 and yet the number of new homes built last year was only 118,760. A combination of high migration figures, low new builds, plus the difficulties that people face in obtaining mortgages and changes in lifestyle choices, such as increasing numbers of single parent families, means that many more rental homes are needed in this country. The numbers simply do not add up.
An independent report on the PRS in England (Private Rented Sector 360 Degrees) published last month by industry expert Kate Faulkner, provided an in-depth analysis of the impact of proposed housing polices. Leading members of the industry including Belvoir, ARLA, British Property Federation, RICS, The Property Ombudsman Ltd (TPO), Chestertons, Concentric Lettings, Countrywide, Leaders, Knight Frank, Savills and Your Move supported this report. The conclusion was clear - it is not the PRS that needs remedying in this country, but the supply of social and affordable homes.
The majority of letting agents work extremely hard on behalf of tenants as well as landlords and it is completely appropriate that tenants bear the cost of this work rather than landlords. Outlawing tenant fees will simply mean that tenants will suffer, with letting agents unable to provide them with the standards of service and levels of protection they deserve. Tenants could easily become vulnerable to rogue private landlords who may try to take advantage of them by illegally charging for maintenance issues, failing to carry out regular property checks and leaving them without redress to The Property Ombudsman.
If landlords are forced to bear the brunt of increasing costs, but are unable to increase rents to help cover them, many are likely to sell up or put their property to different use, further reducing the level of good quality rental properties in this country. As a result, thousands of tenants could become homeless, because there will be nowhere for them to go.
We firmly believe that Belvoir is in a strong position to cope with the effects of any proposed changes to legislation. However, we also believe that these changes could result in the