This week saw the publishing of the Liberal Democrat manifesto, and their proposals to tackle the private rented sector (PRS). You can view a summary of the main proposals impacting landlords and their businesses here, however we look at a few key points below.
Longer Term Tenancies…and Rent Controls?
Just like Labour, the Lib Dems are proposing longer term tenancies of three years or more with an inflation-linked annual rent increase built-in.
However, unlike Labour, the Lib Dems only say they want to “promote” such tenancies rather than make them the default. How they would look to go about promoting such tenancies is the interesting part of this proposal, but unfortunately that is also the part that is lacking (and somewhat a moot point as they are only at 7% in the polls….).
Some landlords, such as those renting to families, could benefit from offering longer tenancies to ensure a stable rental income. Promotion of such tenancies could take the form of tax incentives, or discounts on licensing etc. which would come in quite handy as Section 24 begins to bite.
With the Conservatives also promising to “look” at the issue of longer tenancies, this is certainly an issue that will be at the forefront of PRS policy over the next few years.
Letting Fee Ban
All parties at this election have so far pledged to ban letting fees. It’s happening.
However, the exact way in which they will be banned is still up in the air as the election is running along at the same time as DCLG’s consultation.
Interestingly, the Lib Dems policy could be advantageous to landlords. The NLA will be arguing that banning all fees that tenants face would ultimately disadvantage tenants. Tenants should still be charged legitimate costs that they face as part of the process of securing a property. For instance, a nominal fee for a credit & reference check.
Last year, the Lib Dems put forward a Renters’ Rights Bill which, while banning letting fees to tenants, would allow the Secretary of State to permit certain fees to be charged, at certain levels, for specific services.
If fees are to be banned, the NLA believes that this model is the best way forward.
Help to Rent
A policy unique to the Lib Dems is their proposal to establish a new Help to Rent scheme, providing government-backed tenancy deposit loans for all first-time renters under 30.
Such a policy could be positive for tackling homelessness, but may be a mixed bag for landlords. With the letting fee ban also coming into effect it would lower the financial barrier for moving properties and increase flexibility in the sector. Landlords could benefit by having greater access to good tenants.
However, many landlords take a deposit so that the tenant has “skin in the game” and treat their property with care. Could the Government providing deposits risk some tenants not worrying about how they treat their rented property?
It’s a policy with promise, but would need to be looked at in more detail to weigh up the risks and benefits.
Tackling “rogue landlords” is in vogue with political parties these days, and the Lib Dems are no different. Their plan involves the imposition of mandatory licensing to all landlords across the country to protect tenants from the roguish minority.
They would also allow the public to access the Rogue Landlord & Agent Database that is being implemented under the Housing & Planning Act 2016.
Simply put, this would be a massive expense on every landlord in order to seek and punish a small minority.
Although it should go without saying, the NLA would not be supportive of such a blunt and costly measure.