x
By using this website, you agree to our use of cookies to enhance your experience.
By Marc von Grundherr

Director, Benham and Reeves

OTHER FEATURES

Which Government is the lesser of two evils for property? 

Our politics seems pretty broken to me and whilst I don’t wish to take a side between one flavour or the other, I do worry not just about the fragility of our political system and indeed our political class these days - but particularly about the effect of bad politics on the property sector.

On the one hand, the current government used our sector to prop up the housing market during the pandemic in order to ensure positive sentiment. 

As Covid cases were climbing and uncertainty and fear rose, a parallel disintegration of home values would have been fiscally catastrophic. And so we, as a sector and probably as a country, dodged the proverbial bullet and have enjoyed one of the most buoyant property markets in memory - probably ever - thanks to the Sunak Super Soaker that was the stamp duty holiday. 

Advertisement

On the other hand, inflation caused by the unleashing of consumer spending after two years of lockdown and Russia’s invasion of the Ukraine, have combined to send inflation soaring and consequently the Bank of England’s reaction has been to ‘protect’ its inflation target mandate by raising interest rates five times in recent months. Someone needs to tell Bank of England governor Andrew Bailey that a bit of inflation is rather better than a full-blown recession. And fast.

As if a looming recession were not of enough concern, landlords and letting agents also must contend with a raft of legislation that empowers tenants all whilst they tackle mountainous rental arrears that have built up over the last 24 months. 

The relinquishing of the not-so-scary-in-practice Section 21, a ‘must take pets’ mandate, EPC ‘C’ standards on all let homes, landlord redress, the abolition of tenancy fees, lower tax relief benefits … have all either been put into place or are coming. Landlords and agents have been bashed by our legislators and will continue to be so under this political administration, one that despite having over 90 of its MPs that are landlords, ironically fails to understand the first thing about the private rental sector.

But what if the other lot were in power?

As I write this piece there remains a beer-cloud the size of Durham hanging over Keir Starmer’s head and one which may burst and lead to his self-ordained resignation as Labour leader. If that happens and someone that’s, shall we say, more popular, gets the job then perhaps the red team may soon clinch power in the face of a government beset with sleaze, errors and a shaky command of the economy?

Regardless of your political persuasion you would have to admit that for landlords this eventuality would be bad news. 

Labour, as is their mandate really, has to side with tenants. In doing so it will seek to ‘tackle’ landlords and we will no doubt start to see even more legislation proposed that liberalises tenants and puts them even more in control of tenancies. Day one of a new Downing Street occupant would no doubt herald a resurrection of proposals to cap rents and to tax landlords harder, perhaps even raising capital gains tax solely for those that own multiple properties and despite the fact that these owners are propping up a deficient social housing sector.

In closing, I am not advocating that landlords like myself favour one political leaning or another. Far from it. What I’m articulating here is that whether right or left, blue or red - sadly we will always be the squeezed middle regardless of what colour the curtains are at Number 10. 

* Marc von Grundherr is director at London lettings agency Benham & Reeves *

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • icon

    I realise it wasn't the main point about the article....but when listing all the changes hitting landlords why does nobody mention the move to periodic only...ie no fixed term agreements?
    I know I now sound like a broken record, and seem to be the only one who cares, but I think that switch is disastrous.

    icon

    The Government didn't have to opt for that model - indefinite periodic tenancies- when they wanted to give more power to the tenants as part of what they hoped would be a vote winning populist agenda.

    Welsh Labour simply extended the no fault notice period from two months to six months. They were more intelligent and rational in their approach to the private rental sector - and didn't want to destroy it.

    Landlords and tenants have been unlucky in England. The impending abolition of fixed term tenancies is leading more and more landlords to withdraw from the market and making it much harder for tenants to find good accommodation.

     
    icon

    You're not the only one who cares.
    I'm very concerned about the impact on both the student market and winter lets. I don't do winter lets myself but I live in a tourist area so I'm pretty aware of their value.

    Certain areas of university cities are more suitable for students than others. If students decide to leave in March we're not going to leave the houses empty until September. We'll re-let to either employed or unemployed single people to retain our HMO letting rights. We can't risk letting to families if we operate in Article 4 areas. Once those houses are occupied by non students they will be out of the student market for the foreseeable future. Students will spread further and further from the universities completely changing the character of family areas. They will have to travel much greater distances to get to university, which isn't great from an environmental point of view.
    Properties that are used as holiday lets in the summer are often used as 6 month or shorter lets in the winter. Very useful for seasonal workers who have spent the summer working in agriculture, the festival circuit or as a holiday rep abroad, etc. Or for people planning major renovation of their own home. For years it's been both types of use coexisting perfectly. Landlords would have to choose whether to only do holiday lets or try for a series of short lets without being able to line up the next one until the property is vacant. It would lead to huge amounts of totally unnecessary voids and would be an appalling under utilisation of housing stock.

     
    icon

    Ellie. As a Welsh landlord I can advise thet it was originally proposed to bring in new contracts in Wales starting July 2022. These contracts not only include your 6 monthly notice period for landlords, but also cancels S21 and landlords can only terminate a contract for a specific reason of which there are several and many of them are not mandatory. This appears to have been rushed in so fast that neither landlords nor agents were able to implement these new directives by July and the deadline is now extended to December. Incompetence reigns and tenants will be left with little choice when seeking a tenancy.

     
    icon

    Thank you for updating that information, William.

    It doesn't really surprise me because the Welsh Government is Socialist.

     
  • icon

    About 10% of labour MPs are landlords. I believe they will want to ensure good rentals for tenants eg no poor standards, but I think they will provide similar results to the Tories.
    Starmer has been cleared by Durham. He did not break the regulations.

    PossessionFriendUK PossessionFriend

    Re Starmer cleared by Durham, If you watch Mark Steyn on GB News he suggests Starmer tried to or claimed he had taken out an injunction on the actual result of Durham's investigation, and Steyn says he DID receive a penalty !

     
  • icon

    Lesser of 2 evils some choice.
    For all the Regulation’s we now seem to be having more residential fires than ever with all the Regulation’s under the Sun, waste of time when LL is made powerless and excluded from the property, loss of control means extra coming & going unofficially and subletting, plus HMO’s promoting room lettings with cooking facilities in rooms, so not just one source of potential fire at the property but several.

    icon

    Excellent points!

     
    icon

    It's a pity that the Government didn't focus on solving those very real problems in the private rental sector, instead of causing problems.

     
    icon

    brilliant point!

     
  • icon

    It goes against the grain to say it but I think landlords have less to fear from a Labour government. Everyone else will be worse off but last time Labour were in power was a fantastic time for landlords. It may have been because Tony Blair was creating optimum conditions for his own property owning gains.
    In 1997 I was a young widow on Income Support. By 2010 I owned 5 houses (all with at least 4 bedrooms) plus the house we lived in.

    The coalition wasn't too horrendous but since the Conservatives gained overall control in 2015 it's been assault after assault on rental housing.

    icon

    Respect to you. Jo, on your achievements.

     
  • icon

    You've done brilliantly Jo!

  • icon

    Never has there been such a concerted attack on private Landlord. Jo you done exceptionally well in difficult circumstances. Many of us didn’t get an easy start certainly no silver spoon like many today. I missed out on further education as I had to work to exist and dad rip at 47, when I see the chance so people have with parents support. I worked in the fields at 15 on piece work for example thinning mangles, beet & turnips @ 1s-2d per 100yds your own sandwiches & bottles of cold tea, one 4 day job earned £8-7s-6d delighted at the time, crawling the furrows with canvas bags tied on my knees with twine, that equates to 8 miles on the knees on storey hard ground. Certainly given no advantage when I see other continuing education into their twenties.
    I could never have imagined in my wildest dreams that a Conservative Government would have treated us so unfairly no just that but went out of the way to damage us.

  • icon

    The current Conservative Government has now reaped the consequences of poor decision making. Let's hope that someone takes over who will think through the implications of their policies - and not be quite so unfair to the ordinary, hardworking people who are providing the housing.



  • icon

    Jo & Ellie excellent comments from you both yesterday if I may say so, if other landlords would read and grasp the contents of what you are conveying to them about the reality of what’s coming our way. Government or someone in Authority might take notice before it’s to late, 2 million landlords without a voice only a couple of dozen ever comment on here. The Organisation’s that’s supposed to help us haven’t grown much since Amalgamation and now only interested in creating more money streams for themselves on the back of those Anti-landlord new Regulations that’s clear enough.

    icon

    The NRLA are firmly in bed with the government. I have stopped being a member years ago because of this and I was also given the wrong legal advice years agol

     
  • icon

    Michael, you always hit the nail on the head in everything you write about the issues facing landlords and tenants, and therefore you are doing a fantastic job. Not being afraid to speak the truth is very important.

  • icon

    Why we small landlord need to marry to political parties? We should be our own force with our own interests. I like many I have done well with either party, but depending on the time. In long term time and political situation do not favour small landlords. We need to have our own force to be able to negotiate with the political parties. I prefer to be a solitary landlord rather than to be attached to a political party. What it is necessary is small landlords to be united and negotiate on equal terms with any political party. All political parties are there to take advantage of non-united small landlords. We are where we are be cause we are allowing them to vilify us, screw us with ridiculous legislation, and extortion us wherever the opportunity arises. We are required to have our own voice and counteract every single vilifying argument, every new standard and to show how ludicrous are the politicians. The continuous failure (both conservative + labour) building social housing of good standards that they are dictating are not there. However, they blaming on us! We are not counteracting . Time to awake colleagues. Better to be a solitary lld rather than to be associated with the poor politician's company.

    icon

    I HAVE APPEALED NUMEROUS TIMES FOR US SMALL LANDLORDS TO GET TOGETHER AND FIGHT FOR OURSELVES. SADLY NO ONE HAS VOLUNTEERED TO HELP.. OFFER STILL THERE THOIGH

     
  • icon

    I'm not so sure periodic tenancies should be a problem for most landlords if handled properly and there is proper means for landlords to repossess if needed. All my tenants are periodic. I just give them a contract for the statutory 6 months and tell them that they can stay as long as they like as long as they don't cause me any problems. I even allow them to give me 1 month notice at any time as I appreciate that circumstances can change and people may need to move on. That is half the point of renting, is it not?

    icon

    Agreed, good tenants can stay as long as they like, but sec 21 has been useful to me in the past getting rid of bad tenants quicker and cheaper than sec 8, this white paper is also planning to make sec 8 harder to use as well

     
    icon

    The new legislation allows Tenants to give only 1 month notice, but the Landlord has to have the contract running for 6 months, then give another 6 months notice. One law for the Tenant, another for the Landlords who has to take all the risks and pay all the expenditure. Where is the logic and fairness in that?

     
  • icon

    Rental reform means driving Private landlords Out. or to the wall.
    The problem they will have is by the time the next Election comes along not only will be required to donate our Properties to Tenants. EPC Regulations will be kicking in so Over a million Homes will be unrentable, we are going to see mass homelessness.
    I am sure the Homeless people will be voting for them.

    icon

    Yes this should all kick off in 2024/5 just in time for the new labour government to handle the fall out, no wonder the Tories don't want to win the next GE

     
  • icon

    Peter nearly everyone in the same boat so why the Change other than to stitch up the Landlord.
    They already have Contracts that most Landlords are happy to allow to become and continue as Periodic. So why get rid of Section 21 an integrated of the process undermining the whole
    business.
    There a massive difference between staying as long as they like by consent and staying as long as they like as of a right by a non owning occupant.
    Loads of new blocks of Flats in Ealing all sold more or less apparently but so many vacant bought by over seas investors many from China, how does that help the housing situation.

  • Matthew Payne

    Irrespective of political persuasion, whoever is in power will very soon have to deal with the chickens from the last 5 or so years coming home to roost. The social housing sector is saturated. The PRS is shrinking, when it needs to be increasing by 200,000 a year, and is already at least 2 million units short. House prices or mortgages are out of reach for most, spiralling rents for many more. Throw into the mix 6.8 million "officially settled" EU citizens in recent years who all made the last ferry before the Brexit door slammed shut who have warped the supply/demand curve. We have a major problem that one administration or another needs to deal with, and squeezing the middle even further will make it even worse.

    icon

    Agreed, this could be why the conservatives are doing everything in their power to lose the next GE, leave the problem to labour when the ssss really does hit the fan in a couple of yrs

     
  • icon

    If successive governments hadnt sold off council or the states properties the private rental sector would be smaller thankfully, but if your a Landlord it has been good for you as its either buy if you can, or the private sector

    icon

    I agree David, if governments hadn't sold off social housing on the cheap to their tenants the PRS would be smaller, but they did and continue to do so, it certainly has been good for me and other landlords, what's wrong with that ?

     
icon

Please login to comment

MovePal MovePal MovePal