The politics of property investment
It’s been a strange couple of years for landlords. Not that long ago they were lauded as the saviours of the private rented sector and ‘smart investors’.
But today they are under attack from housing campaigners and, unexpectedly, the current Conservative government – once the landlord’s friend.
So many people now rent they have become a significant political force. Research by charity Generation Rent after this year’s snap General Election revealed that it was the UK’s 4.5 million renters who helped snatch near-defeat from the jaws of success for Theresa May.
And to try and win them back the government has introduced a raft of measures to better regulate the rental market (or throw more red tape at it, some might say).
But are the two parties now that far apart on policy? Here’s our look at property’s political landscape.
The current government has rolled back both the tax exemptions that landlords used to enjoy, as well as increasing taxes in other areas.
This includes the automatic 10% wear and tear allowance which has been replaced by a system requiring landlords to document their expenditure. And the level at which landlords can claim mortgage interest against their personal tax bills has also been severely cut back, dropping to zero in 2020.
And since last year landlords buying property to let in the UK must now pay an additional 3% on top of the usual Stamp Duty levied.
Labour, on the other hand, has not said it would repeal any of these Conservative policies and, given its long-running reluctance to encourage private landlords and its view that they are the cause of many renters’ woes, it’s unlikely the party will change its view.
Licensing rental properties
The past two Conservative governments have overseen an increase in the spread of selective licensing. This is when selected urban areas, usually where deprivation and poor housing are most evident, are targeted with rule changes that require rented private properties and/or HMOs to be licensed, usually for a fee of approximately £500 a year.
During the election the Labour party announced it would introduce a blanket national licensing scheme that would require all landlords to apply for a licence for each of their properties.
Regulation of landlords
The government has announced that it is to introduce a national redress scheme that will compel landlords to register with an ombudsman, plus a ‘housing court’ to arbitrate the most serious disputes between landlords and tenants.
Labour pledged in its most recent manifesto that it would bring in landlord licensing but didn’t specific how or where – for example Wales already requires all landlords to be registered and have completed basic training.
Both parties support tenants being offered the opportunity to take up longer tenancies of three years should they wish to.
The Conservatives are opposed to rent controls, and often say they would lead to a lowering of standards as landlords reduce spending on their buy-to-let properties, something the House of Commons library recently said helped severely reduce the supply of homes when rent controls were last active.
Labour says that if elected it would introduce an inflation cap on rent rises for the duration of a rental contract, a policy that existed under several government of both political hues in various forms from WWI onwards to the early 1980s.