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LANDLORDS VS LABOUR, WHAT COMES NEXT?

Updated: Jul 6



Landlords will face a Labour government keen to reform the private rented sector (PRS)


Sir Keir Starmer will be the new prime minister, with deputy Angela Rayner set to make three housing policy announcements in the next few weeks. Labour has a range of plans for the private rental sector, as well as proposals for the tax system which could affect landlords.

However, the property market is struggling, and house prices fell 0.2% in June, Halifax reports.


The Labour Party's policies often prioritise tenants' rights and affordable housing, which can lead to tensions with landlords who may view these measures as restrictive or financially burdensome. Here are some key points that illustrate this dynamic:


Labour Party Policies on Housing and Landlords


1 - Rent Controls and Caps:

This policy aims to make housing more affordable for tenants but is often opposed by landlords who argue it can reduce their income and discourage investment in rental properties.

2 - Increased Regulation:

increased regulation of the rental market to ensure fair treatment of tenants. This can include stricter enforcement of health and safety standards, limits on eviction powers, and requirements for longer-term leases.

3 - Tenant Rights:

Strengthening tenant rights, banning no-fault evictions, improving the conditions of rental properties, and making it easier for tenants to make complaints and seek redress. Including longer-term tenancies and more stringent regulations on evictions, could make renting more secure for tenants but might increase costs and administrative burdens for landlords. With Labour’s election win and their commitment to abolishing Section 21 ‘no-fault’ evictions, Landlords are likely to act pre-emptively to protect their interests before any legislative changes take effect. 

We have already seen an increase in instructions for Section 21 notices as many landlords move to secure their rental income or prepare their properties for sale.

4 - Affordable Housing Initiatives:

While this policy benefits low-income households, landlords might view it as a threat to their business model if it leads to a decrease in demand for private rentals.

5 - Property Taxes:

Labour has proposed reforms to property taxation, such as a Land Value Tax, which could affect landlords' profits. These taxes aim to address wealth inequality and fund public services but are often resisted by property owners because it could affect landlords' profits.


Landlords' Concerns and Reactions


Financial Impact:

  • Landlords often express concern that Labour’s policies will reduce their rental income and increase their operating costs. Rent controls and increased regulation are seen as direct threats to their profitability.

Investment Deterrents:

  • The introduction of stricter regulations and rent controls may deter investment in the rental market. Landlords argue that these measures can lead to a decrease in the quality and quantity of available rental properties.

Market Uncertainty:

  • Political uncertainty under a Labour government can create apprehension among landlords, particularly regarding changes to property taxes and regulations. This uncertainty can impact long-term investment and property management decisions.


Historical Context and Examples


Labour Governments (1997-2010):

During Tony Blair and Gordon Brown’s tenure, while there were some measures to improve tenant rights and increase affordable housing, the approach was relatively moderate compared to more recent Labour leadership.


In summary


The relationship between landlords and the Labour Party has historically been complex and sometimes contentious, it is marked by competing interests:

landlords prioritise profitability and market freedom, while Labour focuses on tenant protections and affordable housing. This dynamic leads to a natural tension, particularly with Labour in power and able to implement its housing agenda.


As the dust settles on the general election, landlords will be paying close attention to how the Labour party plans to address a range of issues affecting the rental market.


Dates to look for


Activity in the House of Commons is set to resume on 9 July 2024, with a King’s Speech after the start of a new parliament on 17 July 2024.


The Labour Party Conference is due to take place between 22 and 25 September and could give an indication of the government’s key priorities, plus how Sir Keir Starmer has fared in his first few months as prime minister.


Sir Keir said: “Change begins now.”


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