How will the General Election Affect the Private Rented Sector?
Published on May 31, 2024 by Sarah Mac
With a General Election called for 4 July, there is much talk amongst the private rented sector about how each of the political parties will present their policies. With no manifestos published to date, this is still currently unclear.
However, what is clear is that housing policy and private renting will become hot topics over the next few weeks. With this in mind, we’ll take a look at where the four main parties stand on the most important issues affecting landlords in the private rented sector (PRS).
Poll: How will private landlords vote in the 2024 General Election?
A joint survey of around 1,000 property sector professionals undertaken by the National Residential Landlords Association and Goodlord has revealed that 45% of landlords and 39% of letting agents have already made a decision as to how they will vote in the 2024 General Election.
However, 27% of landlords and 19% of letting agents have said they are on the fence and may change their minds, whilst 19% of landlords and 26% of letting agents are yet to decide how they will vote.
The survey has also uncovered that 81% of landlords and 70% of letting agents believe the specific policies of each political party will play a pivotal role in how they decide to vote. So, the parties which take heed of industry concerns should be the ones that stand to benefit from swing votes across the PRS.
73% of landlords have said that PRS-related party policies will influence their vote, whilst only 6% have said policies won’t have any influence.
It is interesting to explore the areas of private rental sector policy pinpointed by letting agents as the most likely to influence their vote.
24% have said that they would be more inclined to give their vote to a party that reintroduced landlord’s tax relief under Section 24.
22% said they would vote for a party that retained Section 21 no fault evictions, which are due to be abolished under the Renters Reform Bill later in 2024.
However, even though PRS policy is a significant area of concern for both landlords and letting agents, there are various other issues that are more likely to influence how property professional vote.
For example, letting agents are more concerned about the cost of living crisis, with more than half of them (51%) citing it as their top priority. This compares to only 17% of landlords citing the same as their main concern.
For landlords, the most important policy area that will be most likely to impact on the way they vote is the general economic competence of the government. 43% of landlords surveyed have said this is their top priority, compared to only 21% of agents.
Where landlords and letting agents do agree, however, is on policies related to the NHS and taxation.
What will happen to the Renters Reform Bill?
The Renters (Reform) Bill carries a variety of reforms, including abolishing no fault Section 21 evictions, changes to legislation around letting to tenants with pets, and the introduction of a property portal and dedicated ombudsman.
The reforms are designed to ‘bring in a better deal for renters’, and signify the biggest changes to the private rented sector in three decades.
Proptech company Goodlord surveyed over 800 landlords and letting agents, and found that landlords are generally feeling pessimistic about the new rules. 25% of those surveyed felt ‘very pessimistic’ and 29% felt ‘somewhat pessimistic’. Only 14% felt optimistic. This compares to 29% of letting agents feeling optimistic about the reforms.
There are, however, question marks hanging over whether the Bill will become law, now that a General Election has been called.
The Renters (Reform) Bill is currently in the Committee Stage within the House of Lords. Whilst it is unclear as to how long it will take to progress through this stage, uncertainty has arisen as to whether it will be passed before the General Election.
To hold a General Election, the Prime Minister has to ask the King to close parliament. This was done on 22 May. It also means that all business in the House of Commons and House of Lords must cease. This includes any debates and the progression of legislation.
As a result, the House of Commons and the House of Lords will dissolve on 30 May. Before this happens, both houses will attempt to complete any outstanding business. Anything that isn’t completed will not enter into law, and will therefore not be continued into the next parliament.
It is therefore unlikely that the Renters (Reform) Bill will receive Royal Assent before parliament is dissolved.
Why are landlords against the Renters Reform Bill?
Landlords have faced a trying time of late. With rising interest rates and fears around the cost of energy efficiency upgrades, it is no wonder so many have been selling up.
As it is more likely a landlord will achieve a better price for their property with vacant possession, many tenants are being served Section 21 notices. But all four parties will seek to abolish this.
In terms of energy efficiency improvements, whilst landlords recognise the importance of upgrading their properties, the costs involved are off-putting. Upgrading from EPC E to C is expensive and, although the current Prime Minister scrapped plans to introduce such a requirement, other parties such as Labour, the Liberal Democrats and the Green Party are keen to reinstate it.
What can landlords expect from the four main parties?
The Conservative Party is yet to publish its manifesto for this year’s election. We can perhaps look to the Renters Reform Bill for direction, however although Michael Gove originally promised the Bill would be law by Christmas 2023, the numerous delays during its passage have meant that it never received Royal Assent before the dissolution of parliament, which means it will never become law and the new government will have to start from scratch with new legislation.
The Labour Party is yet to share its policy for the private rented sector. Angela Rayner has stated on numerous occasions that Labour would abolish no fault evictions within their first 100 days in power, but little has been confirmed other than that.
The Liberal Democrats consider the PRS to be “fundamentally unfair and under-regulated”. They want to introduce a national licensing scheme for landlords and holiday lets; a minimum standards system for landlords, property management companies and gents; improvements to security of tenure, and rent controls whereby landlords would only be able to increase rent by the Bank of England Base Rate during the contract period.
The Green Party’s policies for the private rented sector are set out in its Housing Policy. The document isn’t exactly very detailed, but the key policies include security of tenure with a phasing out of assured shorthold tenancies to become period tenancies with only two months required for tenants to terminate and the abolition of Section 21; rent controls via a ‘Living Rent’ whereby median local rents would take up no more than 35% of the local median take-hoe pay; a toughening up of housing standards, and the introduction of a national landlord licensing scheme.
From now to 4th July… watch this space
We’ll be watching very closely as we move closer to the General Election and the respective parties hopefully begin to make their policies on the private rented sector clearer.
The past few years have been trying times for landlords, but it remains to be seen how well the sector will be supported as new horizons beckon for the UK government.