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March 19

by mydeposits
How the General Election Could Affect Landlords & Letting Agents

Housing has become one of the most hotly contested battlegrounds in the run up to the 2015 General Election.

This is mostly due to what is being called the UK Housing Crisis – namely the fact that, on average, Britain needs to build 240,000 homes a year to deal with the increasing population. In 2014, less than 120,000 were built. This is obviously unsustainable.

This is having a multitude of effects across the housing market – for example, the UK’s lodger market is growing at an incredible rate.

So, it’s no surprise that politicians are looking at ways to change the status quo and appeal to voters that are being affected by this issue.

Change On The Horizon

Both Labour and the Liberal Democrats have outlined their housing manifestos so far, and most importantly have announced potential changes to private renting in the UK.

The Liberal Democrats have been looking at housing reform during their time in the Coalition, including efforts to end the practice of ‘retaliatory evictions’. This bill is currently going through the system, and will receive its second reading in the House of Commons on the 27th of March.

Labour on the other hand is proposing three significant changes.

->They are aiming to make longer-term tenancies mandatory – a response to Shelter’s comments in 2013 that “six- or twelve-month tenancies just aren’t working for England’s nine million renters.

->They are proposing legislation that places an upper limit on rent increases – aiming to prevent what they call ‘excessive price hikes’.

->They’re looking at making it illegal for letting agents to charge tenants fees. Critics have quickly pointed out that these costs will simply end up being paid by the tenant in other ways, eg: through higher rent.

There have also been discussions around the idea of mandatory landlord registration, a system that is already up and running in Northern Ireland and Scotland.

How Do Voters Feel?

The statistics make grim reading for politicians. While parties are looking at ways of wooing tenants, it seems that overall their target audience remain unimpressed.

The National Landlords Association (NLA) found that “[w]ith just six months to go before next year’s General Election, six in ten (62pc) tenants say they are unsure whether any of the political parties will be able to tackle the UK’s housing crisis.”

There are also widespread concerns among landlords and industry professionals that some of the above policies will be detrimental to the rental market, with the NLA also stating that Labour’s private rental reforms are “unnecessary, poorly thought through and likely to be completely unworkable.”

However, in the same article the NLA have some slightly better news for Labour:

“Labour will take some small consolation from the fact that more tenants (13 per cent) believe they have the right approach to housing than any other of the main political parties. Eight per cent of tenants think UKIP are best placed to improve housing, seven per cent say Conservative, three per cent think the Green Party have the right approach, and just two per cent say Liberal Democrat.”

So the down side for Labour – their policies are under attack by critics and voters seem unconvinced that politicians as a whole can fix the housing crisis. But on the plus side, at least their ideas seem to be getting a better reception than other political parties’ plans.

What About The Conservatives?

The Conservative Manifesto for the General Election is, at the time of writing, unreleased but as Bob Neill MP recently pointed out at the NLA’s General Election Hustings event, we know that they would “oppose over-regulation that would drive away investment”.

Earlier on this month David Cameron also promised that the Conservatives would build 200,000 starter homes by 2020 if they win the General Election. So, evidently the housing crisis is going to be part of the Conservative agenda in the future.

Decision Pending

It seems that whoever ends up forming the next parliament, there will be developments and attempts to tackle the ‘Housing Crisis’ – in fact the ‘Housing Crisis’, if it is as severe as statistics suggest, could quickly become a dominant topic for the next government.

The approach to fixing it, however, will differ greatly depending on who ends up in power. Exactly who – or what mix – we end up with will determine how drastically it will affect all of us in the rental sector, so we’ll have to wait until the 7th of May to find out.

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