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.
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 *
