Labour’s PRS Rent Control And Tenure Plans Under Attack
Labour’s manifesto confirms their plan to introduce 3 year tenancies and a ceiling on excessive rent rises in the UK’s private rental sector (PRS).
Previous Government’s have tried introducing rent controls and the result discouraged the building of new homes as well as reducing more financial investment in their rental property portfolios by landlords.
For years rent controls caused damage to the nation’s housing market, reducing the number of properties being built and recovery took almost a decade. The current rhetoric being touted around by politicians could have disastrous consequences for house builders and landlords alike.
The introduction of longer term tenancies is very much geared towards tenants but fails to address the problems already faced by landlords when tenants abscond without giving any notice, leaving the landlord out of pocket and looking for new tenants.
The UK’s private rental sector (PRS) has improved dramatically over recent year’s thanks in part to the introduction of tighter legislation, but there remains a delicate balance between regulation and altering the relationship between tenant and landlord. Intervention on rents and security of tenure has in the past damaged both market liquidity and good business values within the PRS.With all the uncertainty surrounding the political posturing it is becoming clear that many potential property buyers and PRS landlords are waiting on the election outcome before purchasing residential properties or expanding PRS rental property portfolios.
The current government have made changes to stamp duty taxes and introduced measures to help people purchase properties using the Help To Buy scheme in a bid to keep the UK housing market buoyant.
Mortgage costs have fallen 20% since November 2014 and the cut in the stamp duty rate on property purchases below £935,000 (GBP) will have some influence on the housing market according to estate agents, but the political posturing is still having a detrimental effect as buyers await the election outcome and landlords must wait to see which political party will ruin the PRS.
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