Housing supply rather than the private rented sector (PRS) made the headlines during the Conservative and Labour Party conferences this year as the main parties committed only to the basics – delivering more homes across the country.
While Prime Minister Rishi Sunak did not mention housing at all during his keynote speech in Manchester, Labour Leader Sir Keir Starmer promised to build 1.5m new homes and new towns by reforming planning laws and securing private finance.
But while everyone can agree supply is a critical issue hampering the PRS, other pressing concerns were left unaddressed by politicians from all sides, says Neil Cobbold, Managing Director of leading client accounting and automated rental payment specialists, PayProp UK.
According to Hamptons, 70% of landlords own mortgaged rental properties and they estimate up to 225,000 of them would be unprofitable at current interest rates. This leaves landlords with a difficult choice – to raise rents, take the loss, or sell up, which could leave tenants facing the consequences of higher rents or lack of housing.
Despite this, there were no new announcements from either party on measures to support the industry as it battles the consequences of high interest rates.
“Both party conferences were an opportunity for politicians to set out their stands to the public ahead of the next election, which is widely expected to take place next year,” Cobbold says. “While increased housing supply will be welcomed, it will take time for promises to turn into bricks and mortar, and more needs to be done right now regarding affordability for tenants and landlords alike.”
Renters (Reform) Bill returning to Parliament
While the Renters (Reform) Bill failed to get a mention during Michael Gove’s speech as the Secretary of State for Levelling Up, Housing and Communities (instead he also committed the government to building more homes), he did confirm during several fringe meetings that the Bill would return to Parliament for its second reading in the autumn after party conference season. This limits the government’s time to table it for discussion before the State Opening of Parliament by the King on 7 November.
Cobbold explains: “News that the Bill is returning to Parliament is also welcome, but in order for MPs to properly scrutinise it, they need more details on some of the reforms, especially the proposed court changes. As an industry that lives and dies by our clients’ goodwill, we need landlords to have confidence in the new eviction process proposed.”
Labour rules out rent controls
In Liverpool, the focus at the Labour Party conference was around building more social and privately owned homes rather than the PRS. Matthew Pennycook, Shadow Minister for Housing and Planning, did however confirm a future Labour government would look at regulating managing agents and also ruled out rent controls, saying, “We don’t think rent controls are the answer and we think they might actually make things worse for tenants”. This comment was made at the ‘How Does Labour Solve the Housing Crisis’ fringe meeting organised by Labour List and the Joseph Rowntree Foundation.
Labour’s Shadow Chancellor of the Exchequer Rachel Reeves also introduced a new policy to levy additional stamp duty on foreign property buyers, but failed to say at what rate this extra tax would be charged.
“This party conference season feels like a missed opportunity for politicians to propose solutions to the problems facing the PRS. Further details on the Renters (Reform) Bill and a more precise timeline for when its proposed changes will hit the sector were also sorely lacking from the government,” says Cobbold.
“While the entire industry will be happy with the commitment of the major parties to build more homes, pitching home-ownership to the electorate in the distant future does not solve the very real issues tenants and landlords are facing right now.”