Hamptons says there is little difference between the Labour and Conservative parties in terms of their housing policies.
Both parties have unveiled housing schemed reminiscent of Help to Buy, as well as targeting building more homes and carrying out aspects of the Renters Reform Bill, including scrapping Section 21 evictions.
Aneisha Beveridge, head of research at Hamptons, said:“When it comes to housing policy, there is little difference between the two major parties. Both are fighting for the centre ground with a focus on helping more people become homeowners.
“We saw in the local elections that much of the shift from the Conservatives to Labour came from mortgaged households, and that’s likely to play out in the main vote, too. But with little substantial housing policy on the table, it’s people’s finances and the path of mortgage rates, the latter primarily controlled by the Bank of England rather than the government, that will dictate how people feel.
“The relatively high level of political instability in recent years has heightened the level of uncertainty for many investors, small businesses and even individuals. Rather than developing a long-term strategy for stamp duty, corporation tax and capital gains, as well as the tax and regulatory environment for second homeowners and landlords, there has been near-constant tinkering with the rules and rates in different directions. For many, this has made long-term business planning tricky and needs to be a key consideration for the next government.”
Hamptons produced a detailed analysis of both Labour and the Conservatives housing policies, an extract of which is below:
THE RENTAL MARKET
Conservative Policy: The Tories are likely to follow the plans set out in the Renters Reform Bill. These include banning ‘no-fault’ evictions, abolishing fixed-term tenancies, making it easier to rent with pets, and creating a National Landlord Register and a Decent Homes Standard for private rented homes.
Labour Policy: Labour broadly supports the changes in the Renters Reform Bill but plans to extend the direction of travel. Their manifesto outlines their intention to abolish Section 21 ‘no fault’ evictions immediately and give tenants the power to challenge unreasonable rent increases. They have also suggested tighter landlord regulation, forcing landlords to investigate reported hazards within 14 days, and may pursue stricter energy performance requirements (scrapped by the Conservatives).
The Labour Party has tried to distance itself from a recently commissioned report recommending that rent controls be pegged to the lower of local wage growth or increases in the consumer price index. However, some MPs are sending mixed signals. While the official Labour line remains that rent controls are not party policy, shadow chancellor Rachel Reeves recently said she could see a case for rent controls in local areas but did not favour a ‘blanket approach’.
Our view: It’s the rental market that could undergo the biggest change with the arrival of a new government. While a Labour government could come down harder on landlords than the Conservatives, they, too, have acknowledged the supply issue in the rental market and the important role private landlords play. There is a balancing act to be had, protecting the 5.2m tenant households across Great Britain while ensuring there are enough homes available for them to rent.
While some landlords are concerned, most have got their heads around the changes suggested in the Renters Reform Bill. However, the possibility of further regulation by a Labour government could weigh on already low levels of investment in the sector and might mean more landlords leave the market. Any form of rent control or stricter energy performance criteria, in particular, is likely to cause alarm.
From a tenant perspective, greater flexibility and stricter rules governing landlords should go down well. However, more transparency within the system may backfire for some. The removal of Section 21 could essentially create a public database of tenants who have been served with a Section 8 notice instead – mostly because they were in arrears or had committed anti-social behaviour. Given that it’s likely to become more costly for landlords to evict problem tenants, landlords will increase their vetting process, which may make it difficult for some tenants to find a home.
