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‘A million tenants could lose their homes if Labour is elected’ claim
Furious reaction to Labour’s political package for the private rented sector continues to pour out from agents.
Belvoir yesterday forecast that the party’s “anti-landlord” rental policies could result in up to a million tenants losing their homes if Labour is elected.
Dorian Gonsalves, Belvoir’s director of commercial and franchising, said: “I am shocked at Ed Miliband’s proposals and his decision to ignore industry experts who have issued warnings about the suffering that his party’s policies are likely to cause to tenants.
“Under a Labour Government, landlords will be forced to commit to three-year tenancies and banned from raising rents above inflation. You don’t have to be a mathematician or property expert to work out how deeply flawed these policies are.
“There are currently 11m people renting property in the UK, which amounts to about 20% of the population and includes 1.5m families with children.
“There are around 4m rental properties available and if just 10-15% of landlords decide to withdraw from the rental market because they are uncomfortable with Labour’s proposals and feel unable to manage their risks – particularly when mortgage rates rise – these homes will no longer be available.
“I would like to know where Ed Miliband suggests these tenants should live. These tenants will either become homeless or have to move in with family.
“We should not forget that it was the Labour Government’s incompetence that contributed to the financial crisis of 2007 and 2008, which resulted in a credit crunch that has left millions of people unable to obtain mortgages or save for a deposit to buy their own home.
“It is therefore short-sighted and irresponsible of Labour to introduce policies that will drastically reduce the number of available rental properties.
“Landlords are tired of being made to look like criminals who are constantly looking to rip off tenants and provide low-quality housing. In our experience, 99.9% of landlords are decent people that provide decent housing.
“Belvoir’s rental index confirms that in most parts of the country there have not been the major rental increases that Ed Miliband speaks of.
“However, if we look back over the past five to ten years and apply Labour’s proposed inflation rule for rental increases to many parts of the UK, then tenants would indeed be paying much higher rents than they are today.
“Labour’s proposals are full of loopholes and merely put forward as a way to attract votes.
“Labour’s policies will not raise standards or increase tenant security. They are likely to cause a housing crisis that will result in millions of people left with nowhere to call home.”
Adrian Gill, director of Your Move and Reeds Rains, said: “Whatever the outcome of the general election, the private rented sector doesn’t need more intervention. Rent rises look to be settling into an affordable rhythm by their own accord.
“Any artificial regulation – be it rent caps, mandatory longer-term tenancies or banning charging fees to tenants – could derail this course. In Scotland we saw the abolition of tenancy fees in 2012 cause an unnatural spike in rent growth and the market has only just recovered from this hiccup.
“A lot of UK landlords are not career landlords – and excessive red tape and legislation may put potential investors off considering buy-to-let as an alternative nest egg for retirement or way to supplement to their salary.
“If investment washes up, ultimately it is only the nation’s tenants that will be left high and dry.”
Chestertons joined in the clamour of warnings, saying that Labour’s proposed reforms – shared by other parties – could shorten supply and push up rents.
Chief executive Robert Bartlett said: “Labour, the Lib-Dems and the Greens all propose major reform to the private rental market, including national landlord registration schemes, minimum terms for tenancies and rent reviews and, in some cases, direct rent controls.
“If a lot of new legislation is imposed on landlords quickly and without proper consultation, there is a real danger that properties may be withdrawn from the market, which will only serve to exacerbate the very problems the new laws seek to address.”
The most furious reaction came from upmarket London agent Trevor Abrahmsohn of Glentree Estates.
He said that the decision to impose rent controls “could dump an unprecedented amount of properties on the market at one time, exacerbated by the Mansion Tax”.
He went on: “Before you know it we could have a full blown property recession, an illiquid market and a ‘truck load’ of negative equity.”
He said of Ed Miliband: “What else is this lunatic going to dig up from the dusty trunks in the attic of the left wing policy house?”
