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Renting or letting? How could the general election affect you?

November 28th 2019
By: Davis Tate
Renting or letting? How could the general election affect you?

The private Rental Sector is being hotly debated by leading political parties, here we detail manifestos of both the Conservative and Labour parties.

The Conservative Manifesto

Deposits

A new scheme will be introduced to allow tenants to transfer their tenancy deposits between tenancies. When moving from one property to another some tenants find it difficult to raise a further deposit for their new property while waiting for their old landlord to reimburse it. The Conservatives have therefore addressed this issue with what they refer to as a ‘Lifetime Deposit Scheme.’ Under this scheme when a tenant moves the deposit will be transferred from the old property to the new without delay and without causing the tenants any financial hardship. There is no information on how this will work with joint tenancies.

Section 21

The Conservatives, including in comments by the Prime Minister, have reaffirmed their commitment to abolishing section 21 notices despite concerns that some landlords are likely to exit the sector if they go ahead with this proposal. The manifesto suggests that abolishing section 21 notices will protect tenants from revenge evictions and rogue landlords. The manifesto also states that for the majority of good landlords their rights to recover possession will be strengthened. We are unclear on how abolishing the s21 notice strengthens a landlord’s position and there is no information on other rights that might provide this increased strength.

Stamp Duty Land Tax

A 3% surcharge is proposed on non-UK resident property buyers. This will affect individuals who do not have resident status in the UK. One of the quirks of the UK immigration system is that it is possible to hold a British passport without having the right to reside here.

It is hoped that the surcharge will help fund new housing programmes and reducing homelessness initiatives.

The Labour Manifesto

Fines and Rent Repayment orders

A new ‘charter of renters’ rights’ is proposed in order to put power in the hands of tenants. The Labour party propose a new national ‘property MOT’. This MOT would introduce a legal requirement for landlords to complete an independent annual inspection to ensure properties are habitable with fines of up to £100,000 and rent repayment orders imposed where they are not. Labour intends for the minimum property standards to be enforced through nationwide licensing and these tougher sanctions for landlords that ‘flout the rules’.

Rent control

The private rental sector will be subject to national rent controls. Rents will be capped with inflation and cities will be granted additional powers to cap rents further.

Section 21

The Labour party mirrors the conservative party’s commitment to abolishing section 21 notices. Labour proposes introducing open-ended tenancies to give tenants security to make their rental properties their homes. There is also a commitment to fund renters’ unions to allow tenants to ‘organise and defend their rights’.

Right to Rent

Labour proposes abolishing the Right to Rent checks landlords and agents carry out prior to the commencement of any tenancy. Labour states in their manifesto that these checks are discriminatory and proposes instead to review border controls to ‘make them more effective’.

Holiday homes

Council’s will be given further powers to regulate holiday or short term lets through companies such as Airbnb. Landlords will also be subject to a levy on second homes used as holiday homes to help deal with homelessness. The levy paid by those labour suggests have ‘done well from the housing market’ will help those with no home.

Funding

Labour will give local councils the power and funding to buy back homes from private landlords that have previously exercised their right to buy.

Benefits

The 5 week wait for Universal credit will be scrapped. Instead tenants will be entitled to an interim payment based on half an estimated monthly entitlement. They also propose increasing the Local Housing Allowance and scrapping the bedroom tax which may mean tenants are better placed to pay any monthly rent.

If you are a landlord and would like to know the current value of your buy-to-let properties, contact your local Davis Tate office and arrange a free rental valuation - there will be no hard sell, just expert, friendly advice!