Housing is always a key policy for any political party, as it’s a topic that affects everyone. The Conservative party did put all its eggs in the Renters (Reform) Bill basket, with the law failing to make it through in time before parliament was suspended. This would be re-opened if the Conservatives were to win a new term.
Alternatively, the Labour Party has released its plans for the private rented sector by proposing a new renters’ charter, which includes extended notice periods for landlords and a plan to end “automatic eviction for rent arrears”.
With the announcement of a 4 July general election, the Conservative and Labour parties are currently the top most popular government parties according to opinion polls. As of 22 May, Labour is holding 45% of the opinion polls and Conservative has 23%. So now is the time to find out where parties stand on certain policies.
Read on for a brief overview of their proposals around some key points:
- Reforming private renting
- Introducing rent controls
- Boosting housing supply
- Helping first-time buyers
- Providing social and affordable housing
- Regulating holiday homes and short-term lets
- Abolishing the leasehold system
- Upgrading the energy efficiency of homes
- Tax on residential properties
- Reforming private renting
Conservative party
The Conservative government’s direction for the private rented sector is no secret. The Renters (Reform) Bill, first revealed in 2019, was progressing through the House of Lords for assention last week before the election was announced. Although the Leasehold Reform Bill passed before Parliament was suspended the Renters reform bill failed to pass in time.
However, with the General Election now Scheduled for 4 July, Parliament will now dissolve on 30 May, so it is unclear whether the bill will become law.
The chance of the bill surviving is extremely small. While the Conservatives maintain their commitment in their manifesto, their ability to continue with the bill may be limited after the election.
Plans within the bill include abolishing Section 21 (“no-fault”) evictions, introducing a new system of rolling tenancies, introducing the Decent Homes Standard to the private sector for the first time, and more.
Labour party
Labour has previously shared that there are “significant doubts” around the version of the Renters (Reform) Bill as introduced, due to multiple provisions being removed from the bill after experiencing staunch resistance from Conservative back-bench MPs.
The party has instead promised a Renters’ Charter, which offers an end to Section 21 ‘no-fault’ evictions, the right for renters to have pets, to make reasonable alterations to a property, introduce a four-month notice period for landlords – and bring in an end to automatic evictions for rent arrears.
- Introducing rent controls
Conservative party
Although some corners of the Conservative party are in favour of a rent freeze, the current government has rebuffed calls for a freeze coming from, among others, the Labour Party Mayor of London, Sadiq Khan.
The Renters (Reform) Bill white paper shared that “this government does not support the introduction of rent controls to set the level of rent at the outset of a tenancy”.
Labour party
There are plenty of vocal proponents of rent controls in the Labour Party, including Sadiq Khan and Manchester Mayor Andy Burnham. However, the party also includes some detractors, such as Shabana Mahmood, a senior MP and Labour’s Campaigns Manager.
The calls for rent freezes tend to crop up in cities, such as London, Liverpool, and Manchester, suggesting that a nationwide freeze or cap would be unlikely, even under a Labour government. In June 2023, Labour scrapped its pledge to bring in rent controls.
- Boosting housing supply
Conservative party
In 2021, the Conservative Party set an ambitious target of 300,000 houses to build by the mid-2020s. However, in December 2022, Michael Gove backtracked and updated these targets as “advisory”.
In December 2023, Michael Gove responded to London Mayor Sadiq Khan, agreeing that “housing delivery in London is far below levels needed” and that “it may be necessary to take further action now, as a matter of urgency, to make sure London is delivering the homes our capital needs.”
The 2023 Conservative Party conference saw Michael Gove restate his commitments to build more homes, with planning reform “high on the agenda.” The party had committed to building at least a million more homes by the end of this parliament but this pledge now looks as if it will fall by the wayside.
Labour party
Labour party leader Keir Starmer has said that he would reinstate mandatory targets to build 300,000 homes per year under a Labour government – as well as update planning laws to help local authorities have more say in what is, and built where.
This has been a consistent message from Labour – and was restated at the 2023 Labour Party conference with a message to “Get Britain Building Again”, now included in their manifesto as a key promise
Labour has also shared that scrapping the house building targets could cost tenants up to £200 per year by 2030.
With landlords exiting the market and house prices remaining stable, it looks as though this figure may increase and supply continues to exceed demand.
- Helping first-time buyers
Conservative party
Prime Minister Rishi Sunak has said he’s considering reinstating the Help to Buy scheme, to help first-time buyers get on the property ladder. However, some say that this will simply inflate property prices more, negating the effect of the subsidy.
In 2022, then-Prime Minister Boris Johnson also committed to extending the Right to Buy scheme to housing association tenants. However, this change has yet to come into effect.
Labour party
Back in September 2022, Keir Starmer announced plans to shake things up, with “no more buy-to-let landlords or second homeowners getting in first.”
The Labour Party has released data showing that two-thirds of children born in 2023 won’t own a home before their fifties – and has said that it’s aiming for 70% home ownership.
To reach this target, it proposes introducing a mortgage guarantee scheme and increasing the stamp duty surcharge for foreign investors.
Keir Starmer has also said that the party plans to give first-time buyers “first dibs” on new-build homes, over existing homeowners – although questions have been raised on how this would work in reality.
- Providing social and affordable housing
Conservative party
A poll recently found that three-quarters of Conservative voters want more social housing built in the UK. The Department of Levelling Up, Housing and Communities has shared that it has invested £11.5bn in its Affordable Homes Programme to “deliver tens of thousands of homes for rent and sale right across the country.”
However, its targets – now deemed “advisory” – only allocated 33,550 homes for social rent. That figure is at odds with the social housing waitlist of more than 1 million households.
Labour party
In the 2023 Labour conference, Angela Rayner reasserted Labour’s plans to build more social housing for people to rent, echoing announcements made in 2022. Currently, social housing sits behind private rented properties, at only 17% of households.
For example, the party will aim to reduce the number of social homes being sold through the right to buy – while making sure that new social housing is built in their place.
More recently, Labour has committed to creating multiple new towns with 40% of homes being affordable housing, to meet their house-building targets of 1.5 million homes over five years.
- Regulating holiday homes and short-term lets
Conservative party
The current government has started to take steps in recent months to crack down on short-term and holiday lets, particularly in tourist hotspots.
The rules around accessing business rates for short-term rentals have already tightened, and two new consultations have recently been published. These will assess planning permissions and a short-term let register in England.
Wales and Scotland have already implemented their own licensing schemes through their devolved governments.
Labour party
Back in July 2022, the Labour Party surfaced a concept similar to the licensing scheme in Wales for short-term lets in England.
This has the same aim as the measures that the Conservative government is suggesting – to help support tourist areas hard hit by the influx of holiday homes. You can read more about the Welsh system in our blog.
The party is also reportedly considering raising the 3% surcharge for second homes and raising the council tax premiums to a maximum of 300% if elected.
- Abolishing the leasehold system
Conservative party
In November 2023, as part of the King’s Speech, the government announced a new Leasehold and Freehold reform bill which was passed before the closure of Parliament before the general election.
The law has made it mandatory that leases now be set to a minimum of 999 years however, a cap on ground rents failed to materialise.
Labour party
Angela Rayner, Shadow Home Secretary, has also committed to overhauling the leasehold system, with the Labour Party previously dubbing the system as “feudal” and “archaic.”
Lisa Nandy, the previous Shadow Home Secretary, approved introducing a “commonhold” system instead – something floated back in 2019 in Labour’s report, “Ending the Scandal – Labour’s New Deal for Leaseholders.”
- Upgrading the energy efficiency of homes
Conservative party
The Conservative party had previously committed to upgrading all rental properties to EPC band C. However, these plans were “scrapped” in September 2024.
This is in recognition of the current pressures on landlords and therefore housing supply. As supplies dwindle and the interest rates remain high for landlords in terms of buy to let mortgages, this was seen as a pressure which could force a mass exodus from the sector.
Labour party
The Labour Party has committed to a Warm Homes Plan, which aims to upgrade millions of homes across England, Wales, Scotland and Northern Ireland.
The party has stated its intention to cut household bills by up to £1,000 every year for families with its intention to ensure every home is upgraded to an EPC band C “within a decade.”
How this will be funded or whether it will be a cost passed back to landlords remains to be voiced.
- Capital gains tax on residential properties
Conservative party
Under the Conservative Party, the capital gains tax allowance (CGT) was reduced from £12,300 to £6,000 from April 2023.
It will decrease further to £3,000 from April 2024. This has added additional pressure to landlords as many are seeing eroded profits as a result of not being able to claim full tax back on the interest of their mortgages.
Labour party
The Labour party has ruled out increasing CGT, with Shadow Chancellor Rachel Reeves saying that it has “no plans for a wealth tax”.
Reeves said in 2021 that “it would be best to tax people who get their incomes through stocks and shares and buy-to-let properties”.
However, Reeves now shares that Labour would instead focus on not overspending public money rather than taxing the wealthy.
Our View
Whichever party takes the reins on July 4th, there will be a considerable amount of time before any legislation is passed. Whilst yes there will be changes in time, each party is under pressure to reform as the number of renters grows in the UK. With home ownership difficult and mortgages at current levels, whichever Government that comes in will always have to make reforms for the growing rental sector.
For landlords changes must be fair with them still able to evict tenants who breach tenancy agreements. Until the courts are able to deal with any reforms or changes to Section 21’s it looks as though it may take a considerable amount of time before any changes come into effect. Both parties are concious of not penalising landlords financially for providing housing within a continuing housing crisis and neither look like they will be making any taxation changes in the near future.
Therefore we predict that the rental market will remain stable at least for the next couple of years. This will give landlords and managing agents the time to adjust and adapt.
As mortgage rates look to be settling and inflation decreases things will get easier for private landlords whilst rent levels remain stubbornly high due to supply issues. This means that yeilds should also remain stable. As the residential sales market also starts to improve, landlords whould start to see capital growth again after 12-18 month of decline due to high mortgage rates since failed Liz Truss premiership.
In our oppinion things are looking more positive…
“Everything gets a little uncomfortable when its time for change, thats just part of the growth process,. Things will get better, be patient.”
Whilst change is enevitable, its worth noting that Newton Fallowell incorporating Goodchilds are on hand to help with legislation changes, advice and guidance on how to make sure your property or portfolio is profitable and stable with quality tenants. We are focused on change and growth, and helping landlords through change to ensure a viable investment.
To help ease all landlords through change we offer the following..
6 Months Free Management for landlords who bring existing tenanted properties over to our fully managed service.
“Really easy to use Goodchilds compared to other agencies. Highly recommend Nick & the team for a seamless process from letting through to managing.” Mr R Venables 2023
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“Been with Nick and the team for a number of years and can can only praise their professionalism and attributes towards helping our rental portfolio and further purchases in the area. Top class and would recommend without hesitation to anyone wanting to use their service.” M Patel
