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Just when you feel that there is nothing else the government, or prospective government, can do to make it harder for a private sector landlord to operate, something else gets thrown into the mix.
As Mrs May has now resigned as Prime Minister and the race has started for her replacement, the Labour party are starting their campaign for leadership in preparation for the next general election; with that come promises, sound bites to attract various groups into voting for them, and Labour party plans for government.
The Labour Party has commissioned a report, ‘Land for the many: Changing the way our fundamental asset is used, owned and governed’. Edited by George Monbiot and contributions from Robin Grey, Tom Kenny, Laurie Macfarlane, Anna Powell-Smith, Guy Shrubsole and Beth Stratford, it has several proposals in it, probably the most radical being that the responsibility for Council Tax should be removed from the tenant and put squarely back on the landlords’ shoulders. A new ‘progressive property tax’ would be introduced, set nationally by the government, rather than as it is at present, by the local authority.
For the landlords who decide to leave their properties empty, the new property tax would be set at a higher rate – there will be no escape from the property tax. It will be equally punitive to owners of second homes and properties owned by non-resident owners.
As might be expected from the Labour party, the aim is to ‘discourage the use of homes as financial assets, reduce the tax paid by the majority of households and encourage more efficient use of the housing stock’.
More efficient? In whose opinion is that? Sorry, it is obviously Labour’s. Remember how they failed to solve the housing crisis when last in government? But apparently, by making the tenants more dependent on the landlord, by taking the responsibility for the payment of council tax for the services they need away from them – this will increase efficiency?
Landlords are already reducing their portfolios; they are maligned for having the audacity to ask for rent; they are criticised when they want to evict a nuisance tenant. It is being made harder and harder for a landlord to manage their properties in a way that will make their investment worthwhile; will this lead to a vibrant and healthy private sector?
The answer to that one is ‘No!’. The sector will get smaller, there will be fewer landlords ready to put their pension funds into property. Can social landlords make-up for the shortfall? Optimistic politicians doubtless believe they can, but is it reasonable to believe this?
Various pieces of research indicate that for ‘generation rent’, for older people, for those on insecure incomes or benefit dependent, the private sector will be their only option, if property need exceeds the supply of social housing. At least 25 per cent of the population are anticipated to be housed in the private sector by 2021.
I try not to be party-political and see the shortcomings of both the major parties but have to say that I am in agreement with the Housing Secretary James Brokenshire’s that the plans for a future Labour government were ‘extraordinary and deeply damaging in equal measure’.
For advice on buy to let issues – Ask Sharon