No matter what political party you support, it’s clear to anyone who has read the Government’s detailed summary of its Renters’ Rights Bill that Labour is no friend of landlords.
While the previous government tried at least to keep a foot in both camps, often trying to appease Shelter and Generation Rent but at the same time mollify its free-market MPs, Labour has no such ideological shackles to bear.
The Labour Government’s reforms and the supporting documentation pay little lip service to landlords, barely mentioning the majority who are ‘sensible’ and emphasizing heavily the ‘irresponsible’ minority who rip off tenants, operate slum properties or do illegal evictions.
I concur with the National Residential Landlords Association that this approach may be ‘noble’ but it is misplaced; yes, there are millions of tenants in England who live in sub-standard homes or have unprofessional or dodgy landlords.
But any balance has been lost. The significant number of measures within the Renters Rights Bill are very much a huge hammer to crack a moderately-sized nut.
This includes England’s new ombudsman and national database (lest we forget the other nations within the UK manage their own private rented sectors) as well as an evictions system that will soon make it much more difficult, time consuming and expensive to evict tenants who stop paying the rent.
What other changes are being made?
I should also mention that the 40-year-old system of Assured Shorthold Tenancies is being swept away and implementing rent increases will soon be formalised into a legal process and restricted to once a year ‘at market rent’. Also, refusing tenants because they have pets, are on benefits or have children will soon also become something attracting fines if done overtly. And those are just the headline measures.
Looking at all this, it is as if Labour believes the private rented sector is not required at its current size.
I gather that was the mood music at its conference in Liverpool this month during the various fringe meetings that took place, several of which were attended by housing minister Matthew Pennycook.
Landlords vs Tenants
The lost balance here is that while it can be argued that a lot of these reforms have been a long time coming (and perhaps would have been better introduced individually over a longer period rather than hitting landlords in one go) what the legislation doesn’t tackle is rogue tenants.
In my experience of reporting on this market for many years, the problem of violent or deceitful tenants is just as widespread as rogue landlords.
This bill, as several experts have pointed out, may protect innocent renters from bad actors, but it will also be a blank cheque for those who seek to dodge rental payments fraudulently and enjoy a free housing ride.
This may sound as if I lack compassion and of course I realise many tenants are struggling to pay their rent, but all the many landlords and letting agents I know have a story to tell about at least one tenant who after moving in stopped paying the rent after a few months, knowing full well that it takes 25 weeks at least to get them out via the courts, and often much longer.
And in one case, the tenant involved worked for a well-known firm and earned more than £50,000 a year, so no one argue they had an economic imperative to default.
My point is that while the Renters Rights Bill, given its name, is all about giving tenants more power within the relationship with their landlord (and that’s no bad thing) too many landlords will eventually feel that they can no longer make a reasonable living from renting out their properties. Supply will dwindle, and rents will rise. Politicians should always be careful what they wish for.