June 2017 Snap General Election - What does it mean for the rental market?
Theresa May has called a snap general election on the 8th June 2017. Announcing the proposal for the snap general election, she said Britain needs ‘certainty, stability and strong leadership’ following the EU referendum. Clearly, the main battle ground will be the leadership of the UK thorough the Brexit negotiation process, however, domestic policies will also be at the forefront of voters minds come June 8th. With this in mind we have compiled an overiew of the main parties manifesto pledges in relation to the Private Rented Sector (PRS).
The Conservative Manifesto has been accused by market commentators of being light on policies directly affecting to the Private Rented Sector (PRS), with the Residential Landlords Association commenting that "...given the previous tax raids on buy-to-let landlords, maybe this is something to be grateful for..."
The Conservative manifesto pledges to:
• Look at how to increase security for good tenants and encourage landlords to offer longer tenancies as standard.
• Strengthen the enforcement of equalities law – so that landlords and businesses who deny people a service on the basis of ethnicity, religion or gender are investigated and prosecuted.
• Halve rough sleeping over the course of the parliament and eliminate it altogether by 2027.
• Reform and modernise the home-buying process so it is more efficient and less costly.
• Crack down on unfair practices in leasehold, such as escalating ground rents.
• Meet the 2015 commitment to deliver a million homes by the end of 2020, delivering half a million more by the end of 2022.
• Deliver the reforms proposed in the Housing White Paper
• Build high-quality, high-density housing like mansion blocks, mews houses and terraced streets – and pledges that government would build 160,000 houses on its own land.
• Support specialist housing where it is needed, like multi-generational homes and housing for older people, including helping housing associations increase their specialist housing stock.
• Work with private and public sector house builders to capture the increase in land value created when they build to reinvest in local infrastructure, essential services and further housing.
With almost two million new homes to rent needed by 2025 it is questionable if this manifesto goes far enough in supporting good landlords. Changes to the tax system must be made to tempt landlords to invest in new homes for tenants.
View the full manifesto
A Department for Housing would be created by a new Labour Government with rent caps, three year tenancies and yet more regulation all part of its plans for the PRS. Labour’s election manifesto includes a raft of housing policies which could have a dramatic impact on the rental market.
The Labour manifesto pledges to:
• Make three year tenancies in the private rented sector standard across the sector, with rent caps linked to inflation.
• Give the Mayor of London new powers to provide additional security for tenants in the capital given the unique pressures tenants here face.
• We will legislate to ban letting agency fees for tenants.
• Introduce new legal minimum standards to ensure private rented homes are fit for human habitation with new measures to empower tenants to take action where their properties are not up to scratch, empowering tenants to call time on bad landlords by giving renters new consumer rights.
• Scrap the so called ‘bedroom tax’.
• Reverse the decision to cut housing benefit payments for those aged 18 to 21.
• Establish a new Department for Housing.
• Insulate more homes with a consultation also on preventing ‘rabbit hutch’ homes.
• Implement new minimum space standards for new housing developments.
• Draft a new national plan to address the problem of homelessness
Historically, rent controls have proved to be ineffective serving only to reduce the supply and quality of homes to let. Concerns have been raised that by introducing these policies, Labour is in very real danger of damaging the housing sector which will do nothing to help the families and vulnerable people renting homes that the party pledges to support and protect.
View the full manifesto
The Party’s manifesto puts mandatory licensing for PRS homes at the heart of its housing plans. Other controversial proposals included in the document are plans to allow councils to levy up to 200% council tax on second homes, which would include buy-to-let properties and ‘buy to leave empty’ investments from overseas.
The LibDem manifesto pledges to:
• Reverse housing benefit cuts for 18-21 year olds.
• Increase Local Housing Allowance (LHA) in line with average rents in an area.
• Scrap the so-called ‘bedroom tax’ and incentivise local authorities to help tenants downsize.
• Directly build 300,000 homes a year, through a government commissioning programme to build homes for sale and rent.
• Set up a new government-backed British Housing and Infrastructure Development Bank with a remit including providing long-term capital for major new settlements and helping attract finance for major housebuilding projects.
• End the Voluntary Right to Buy pilots that sell off housing association homes
• Lift the borrowing cap on local authorities and increase the borrowing capacity of housing associations so that they can build council and social housing.
• Scrap exemptions on smaller housing development schemes from their obligation to provide affordable homes
• Require local plans to take into account at least 15 years of future housing need
• Enable local authorities to:
-Levy up to 200% council tax on second homes and ‘buy to leave empty’ investments from overseas.
-Enforce housebuilding on unwanted public sector land.
-Penalise excessive land-banking when builders with planning permission haven’t built after three years.
-End the Right to Buy if they choose.
In a bid to help those struggling to raise a deposit for their own home they will;
• Help people who cannot afford a deposit by introducing a new Rent to Own model where rent payments give tenants an increasing stake in the property, owning it outright after 30 years.
• Ban lettings fees for tenants, capping upfront deposits and increasing minimum standards in rented homes.
• Help young people into the rental market by establishing a new Help to Rent scheme to provide government-backed tenancy deposit loans for all first-time renters under 30.
• Give tenants first refusal to buy the home they are renting from a landlord who decides to sell during the tenancy at the market rate according to an independent valuation.
• Promote longer tenancies of three years or more with an inflation-linked annual rent increase built in, to give tenants security and limit rent hikes.
However, industry experts warn proposals for the PRS could force some landlords, still reeling from recent tax changes, out of the market altogether.
View the full manifesto
It is worth remembering that the 2015 Green Party manifesto was the only one calling for a restriction in landlords’ mortgage interest relief – a policy which went onto being brought into force by the then Chancellor, George Osborne. On this basis, it is always important to understand what the smaller parties are saying. History has shown us that popular policies are often renamed and churned out by opposition parties if they look like vote winners.
The Green Party Manifesto pledges to:
• Reinstate housing benefit for under-21s, stop Local Authorities declaring young people “intentionally homeless”, and invest in community house-building projects to provide affordable, secure housing options for young people.
• Introduce a “living rent” for all through rent controls and more secure tenancies for private renters,
• Ban letting fees
• Introduce mandatory licensing for all landlords.
• Support the development of a renters’ union.
• Roll out a major programme to build affordable, zero carbon homes, including 100,000 social rented homes each year by 2022.
• End the Right to Buy.
• Abolish the so called “bedroom tax.”
• Take action to bring empty homes into use and trial a new Land Value Tax.
• Help first-time buyers by aiming for house price stability – getting rid of buy-to-let ‘tax breaks’
View the full manifesto