Election 2015 housing manifesto analysis for landlords

Election 2015 housing manifesto analysis for landlords

With the general election being decided tomorrow, Head of Technical and resident political expert at billings provider Glide Utilities, Stuart Ford, give us his analysis on the housing policies of the major parties.

Key issue

Good/Bad

Parties

Comment

Rent caps / control

Bad

Labour

Green

Rent control is never a good idea. The profound economic and social consequences of government intervention in a nation's housing markets have been documented in study after study, over the past twenty-five years. In almost every case where rent control has been applied to a city or a nation it has inevitably led to a shortage of well-maintained rental properties. Landlords are left short of funds to maintain their properties and developers have no incentive to invest in new construction projects, since they are unlikely to be able to make rental business models work.

Labour state that they will cap rent increases to inflation, however, the 5 year inflation rate has been 10.8% whereas the 5 year cost price inflation rate has been 13.0%. The policy could very easily actually lead to massive rent increases rather than have the desired effect, especially if Labour's economic policies were to have an adverse effect on inflation.

Long term tenancies

Good

unless enforced

Conservative

Labour

Green

Tenants in short term lets often feel insecure about their accommodation. Even with normal twelve month tenancies, having to find a new home potentially on an annual basis is disruptive, stressful and expensive. This is not so much of a problem for student lets but is more of a problem with young couples nurturing new careers and possibly new families. Long-term tenancies should be promoted and encouraged, however, they should certainly not be enforced since this could not only be disadvantageous for landlords but also tenants.

Landlord checks

Good

Conservative

Libdem

Green

Most landlords are professional and upstanding, however, we all know that there are a subset which are far from adequate. The introduction of greater checks on landlords and even a licensing scheme is something that most above-board landlords should not have a problem with complying with, assuming such schemes do not come at unreasonable cost to them, and should help tackle the problem of rogue landlords and "slumlords". Certainly the opportunity should not be seen by letting agencies as a way to simply charge extra fees, these measures should be designed to protect tenants.


New home

construction

Good

Conservative

Labour

Libdem

UKIP

Green

There is cross-party consensus on the need to build more new homes in the United Kingdom. The housing shortage is longstanding and while the coalition government has made good efforts to tackle it more needs to be done. The "Green Belt" issue, which has plagued developers for decades, needs to be reviewed and the needs of the many put before the needs of the few who would be affected by construction.

A proportion of the demand for new housing comes from immigration and it would be not unreasonable to argue that building new homes treats the symptom rather than the cause of this issue. However, changes to immigration rules, even if they could ever be approved (since they are a social hot-potato), would take decades to make a difference on housing demand and we have this shortage here and now.

Regeneration

Good

Conservative

UKIP

UKIP lead the way in this area with their pledges to reduce restrictions on the use of brownfield sites and bringing inexplicably empty homes back into use. Recycling is always a good thing and these measures should probably be considered before constructing new homes on Green Belt land if only to show to those who would be affected by Green Belt construction that all the boxes have been ticked.

However, the £1bn "regeneration fund" from the Conservatives is unlikely to go very far. This needs to be a larger figure.

Economic controls

Bad

Green

Perhaps the most alarming policy put forward by the Greens in this area is to give the Bank of England power to curb excesses in the housing market. The housing market is driven by any other market, supply and demand, and to do this would be treating the symptom rather than the cause. The correct treatment is new home construction and regeneration in order to increase the supply of homes, rather than try to control the economics of existing property.

The Greens have also pledged to reverse the changes the coalition made to the spare room subsidy for those on housing benefit. This measure is known erroneously by some as the "Bedroom Tax". The measure was introduced in order to encourage appropriate distribution of social housing stock among those who required it and plays an important part in reducing the shortage of housing in particular areas and across certain social groups.

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Latest Comments

Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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