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Since Ed Miliband announced that Labour plans to introduce a number of key changes to the private rented sector, there has been a great deal of criticism levelled in his direction. Most industry experts believe that his proposed reforms will be disastrous and cause untold damage.
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Miliband’s critics say that he is simply trying to win voters over before the general election, although as the Telegraph pointed out this morning it is a tactic that could backfire given the number of Labour MPs who dabble in the property rental market.
Labour’s Key Rent Reforms
• Rent caps – Labour wants to introduce rent caps, despite the fact that other countries have slowly been abolishing them. Critics say that introducing rent caps will discourage investment in the rental market and reduce even further the supply of available housing.
• Three-year tenancies – Labour thinks longer term tenancies will provide more certainty for tenants. Critics argue that costs will rise and the tenant-landlord relationship will become even more contentious as landlords struggle to evict problem tenants.
• Abolish letting agent fees – Abolishing fees will encourage letting agents to pass on costs to landlords and therefore rents will rise.
Private Sector Landlord Speaks Out
One of the biggest private sector landlords, Kevin Green, has had his say in the wake of Miliband’s announcement. He thinks Labour’s planned reforms won’t work:
“Whenever a free market supply and demand is meddled with, there is always fallout, which will inevitably cost the Government more money. It makes no commercial sense whatsoever to cap rents to private tenants.”
