BLOG: ‘Labour’s renting reforms are welcome, but must be balanced’

The new Labour government has a real opportunity to deliver on renting reforms, which under the Conservatives became trapped in a vicious cycle of becoming too complicated for its own good.

So it is good to see that the Renters’ Rights Bill has been included in the King’s Speech and is high on the legislative agenda from the outset.

My main hope for this Bill is that that we see a version of it emerge under Labour that has been simplified and balanced, so that it works for all stakeholders.

The key measure that needs to strike a fair balance between working for both landlords and tenants is of course the abolishing of Section 21, or ‘no fault’ evictions.

In practice, landlords should not have an issue with this change in the rules, and I am likewise in support of getting rid of no-fault evictions as long as there are robust provisions in place that mean landlords are able to efficiently deal with problematic tenants who are abusing the system.

Landlord exit

For most of the private rented sector, this is rarely a problem, but it is nonetheless a risk that landlords take on, and so they need to be protected or we could see landlords exit the market.

However, just stopping landlords from leaving the market cannot be the end goal. It is vital that the new government aims to encourage more private investment into the rental market to increase the number of homes available to rent in line with growing demand, which should include expanding the supply of affordable housing.

Another measure that has previously been tipped is abolishing fixed-term tenancies, which if introduced would create more problems than it would solve.

Broadly speaking, both landlords and tenants want to enter long-term contracts which see tenants paying a fair price to be settled into a good quality home, as well as having peace of mind that their rent will not unreasonably increase, and that the landlord has committed to not selling up during this period.

Tax changes?

We know that wider reform of the private rental sector is high on the new government’s agenda, and I suspect we will see further changes to the tax regime introduced later this year, possibly at the new Chancellor’s first budget statement in the Autumn.

If this is indeed the case, I hope to see the government re-introduce mortgage interest rate relief for landlords, in recognition that the policy to remove this has only been detrimental to the market.

It has failed as a policy and served as a core reason for rents increasing by around 40% since the changes were rolled out, making it more difficult for renters to find suitable homes, let alone save up to buy.

We’ll have to wait and see, but if the old idiom that change begets change is true, the new government has plentiful opportunity to change things for the better.

Greg Tsuman is Director of Lettings at London estata agency Martyn Gerrard.