22 May Focusing on rent control will not solve demand for private rented property
Propertymark is seeking clarity from the Labour Party over how it will achieve its aims in its latest review into the private rented sector.
The Labour Housing Group’s Independent Review of the Private Sector was published at the Local Government Association in London on Wednesday 15 May in the afternoon.
The report consists of five aims, one of which is to increase the supply of social houses via a ‘holistic approach’, and to create an ‘essential’ National Landlords Register.
Other pledges include ending no fault evictions, a system of rent ‘stabilisation’, which would mean annual rent increases, and stopping private rental sector landlords from moving to other sectors such as the short-term and holiday lets sections.
Whilst some measures like building more social homes were welcomed by Propertymark, there needs to be more clarity on aspects such how Labour can achieve its aims of ending no fault evictions, rent stabilisation, and preventing private rental sector landlords from moving to other sectors.
There was also no mention of ensuring property agents are appropriately qualified and regulated.
In January 2023, the Leader of the London Borough of Hammersmith & Fulham, Councillor Stephen Cowan, said that he would be reviewing the private rented sector for Labour should they get an opportunity to reform it in anticipation of a Labour victory in the next general election.
The intention behind the review was to ‘transform’ the UK’s private rented sector. It was compiled with the help of many groups ranging from academics to trade unions, and more.
Labour have already signalled that they would extend Awaab’s Law, who died in a Rochdale social flat after the two-year-old boy was exposed to mould that caused him to have a respiratory condition, to the private rented sector if they win power.
Prior to the review’s publication, Propertymark urged the Labour Party to consider proposals to reverse former chancellor George Osborne’s decision to end mortgage tax relief for landlords, which has resulted in rents rising due to investors not being able to offset any financial costs against tax liabilities, especially when landlords need to break even with rising costs.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, and Nathan Emerson, CEO at Propertymark, also met Councillor Cowan as part of the review and fed into the Private Rented Sector Commission’s Independent Review into the Private Rented Sector in England on behalf of Propertymark members.
68 per cent of agents said they had paid for an expensive repair that exceeded their everyday maintenance costs in Propertymark’s 2019 report Private rented sector costs: property maintenance and rent controls.
Additionally, 53 per cent of buy-to-let properties sold in March 2022 left the private rented sector and there was a 49 per cent decrease in properties available to rent per member branch in March 2022 in contrast to March 2019, which also results a surge in rental costs due to increasing demand for current supply, according to a 2022 Propertymark report titled A shrinking private rented sector.
Mr Douglas comments:
“The Private Rented Sector Commission’s Independent Review into the Private Rented Sector in England sheds light on much needed areas of reform including around increasing standards and improving affordability. Having provided input into the Commission’s work, Propertymark is pleased to see a focus on professionalising the sector and equalising tax across long and short-term letting.
“However, mandatory qualifications and licensing of letting agents is key rather than minimum training requirements and the Review places too much emphasis on rent control or rent stabilisation measures without understanding the impact of rent cap measures we have seen in Scotland. Essentially, the way to bring down the cost of renting is to increase the supply of homes to rent.
“There is also little reference to having a written tenancy agreement, compulsory inventory checks to prevent disputes and investment in local authorities to carry out inspections and enforcement – these are some of the fundamentals that all policy makers should be focusing on if they want standards to increase across the board.”
