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Impact of Political Party manifestos on Landlords

Mon 24 Jun 2024

With the General Election approaching, it's crucial for landlords to understand how the main political parties' policies might affect them. Here’s a summary of what each party is proposing:

 

Conservative Party

  • No-Fault Evictions: Plans to abolish Section 21, increasing tenant security but potentially complicating property repossession for landlords.

  • Housing Supply: Aiming to build 1.6 million more homes by 2030, with a focus on brownfield sites and increasing density in London.

  • Stamp Duty: Abolishing stamp duty for first-time buyers on properties up to £425,000 and reintroducing the Help to Buy scheme.
     

The abolition of Section 21 could lead to longer tenancies and more secure renters, but may make it harder for landlords to reclaim properties. The focus on new housing supply might eventually stabilize property prices and rents.

 

Labour Party

  • No-Fault Evictions: Plans to ban Section 21 evictions.

  • Rent Controls: Introduction of rent control policies and "rent smoothing" linked to the Bank of England base rate.

  • Landlord Licensing: Mandatory licensing for all private landlords to ensure compliance with property management standards.

  • Energy Standards: Tightening Minimum Energy Efficiency Standards (MEES), potentially requiring property upgrades.

 

Increased regulation through licensing and tighter energy standards may result in higher operational costs. Rent control measures could limit income but provide stability in rental prices​.

 

Liberal Democrats

  • Section 21: Plans to ban no-fault evictions.

  • Rent Controls: Proposing “rent smoothing” linked to the Bank of England base rate.

  • Landlord Licensing: Introducing a national licensing system for landlords and property management standards.

  • Energy Standards: Tightening of Minimum Energy Efficiency Standards.

     

The ban on Section 21 and licensing requirements may increase regulatory compliance costs. Enhanced energy standards could necessitate property upgrades

 

Reform UK

  • Section 24: Intends to reverse the 2019 tax changes affecting mortgage interest relief.

  • Regulation: Opposes the Renters Reform Bill, prefers boosting enforcement of existing laws.

  • Social Housing: Prioritizes British nationals for social housing.

 

Financial relief through tax changes could benefit landlords, while reduced regulatory changes might maintain the status quo.

 

Green Party

  • Stable Tenancies: Replacing assured shorthold tenancies with more stable rental agreements.

  • Rent Controls: Introducing a 'Living Rent' policy to cap rents at 35% of local median take-home pay.

  • Housing Standards: National landlord licensing and stricter housing standards to improve property conditions.

     

More stable tenancies and rent caps may reduce rental income but could lead to longer-term tenancies. Enhanced housing standards and national licensing could increase operational costs but also improve property conditions​

 

Key Considerations for Landlords

  1. Abolition of Section 21: Most parties aim to abolish no-fault evictions, increasing security of tenure for tenants but potentially making it harder for landlords to regain possession of their properties.

  2. Rent Controls: Varying degrees of rent control measures are proposed, which could limit rent increases and affect rental income.

  3. Licensing and Regulation: Increased regulation and national licensing schemes might add administrative burdens but could also level the playing field by enforcing higher standards across the sector.

  4. Taxation and Financial Incentives: Reversing Section 24 by Reform UK could benefit landlords financially, while other parties focus on tightening regulations and improving tenant rights.