Ahead of the election next Thursday, Labour are attempting to pull out all the stops in order to win the vote of the younger generation.
If Labour are elected in to power they have pledged to remove letting agent fees for tenants as well as introducing both longer tenancies and rent caps within the month. This would be a disastrous move for landlords across the country who would potentially be squeezed out of the market. Rental caps and three-year tenancies would cause many tenants to remain in their agreements for the full length of their contract to avoid rent hikes from moving tenancies.
This would cause the already short supply of properties in the private rental sector to decrease further, as properties take longer to become available on the market. The Association of Residential Letting Agency has condemned Labour’s proposals, with 72% of their members stating that proposed rent caps and three-year tenancies would force landlords to leave the market.
Without assured short-hold tenancy agreements in place, landlords could be burdened with the rising costs of inflation which would cause a negative impact on the upkeep of their property. With the tenant not paying for the upkeep of the property, this would cause many homes to fall into disrepair as landlords find it economically unviable to bankroll the upkeep.
The supply of private rental homes would consequently be reduced as less people are moving on in their search for new tenancies or stepping on to the property ladder. There have been better proposed solutions to the drought of new privately rented homes available, including the Tory plans to build 200,000 starter homes with a 20% discounts for first-time buyers.
There are also other schemes already in place including a variety of Help to Buy plans or Deposit Match Schemes, however the key denominator is the lack of homes available on the market. An increase in the number of homes would reduce the value of homes across the board allowing more people to afford to purchase the first home.