Labour has announced as part of their “cost of living crisis” campaign that they will introduce reforms to the rental sector if they are elected. These include three year tenancies, rent caps and the scrapping of tenant fees with all of the ideas having been guided by RICS (The Royal Institute of Chartered Surveyors).
It’s been met with a mixed reaction and ARLA’s Ian Potter has said that “I am deeply concerned that Labour has today announced a series of ill-thought through proposals which will have an adverse effect on tenants in the private rental sector. The proposals show a real lack of understanding of the rental market. Under their pledge, people struggling with the cost of living will be under even greater pressure.”
These ideas are not new and having been lobbied relentlessly by the charity Shelter, and then implemented in Scotland, tenant fees were abolished. So if Labours proposals were introduced in England and Wales, what would happen? Due to being a Martin & Co Franchisee in Hinckley and one of 200 offices nationwide, I can easily pick up the phone and speak with a fellow counterpart north of the border and ask. The answer is that if tenant fees were scrapped, in general, Letting agents revenue would drop by 18% overnight. - quite a big chunk. Which unfortunately, for any property investor would have to be passed onto the Landlord.
Bad news for Letting Agents and bad news for Landlords who use an agent; however it’s also bad news for tenants. Although rents haven’t apparently risen yet, many long term Landlords have had enough and begun to sell their properties. Some have even sold them in Scotland and then bought alternative property in England instead.
So with a lack of rental stock, the law of supply and demand would indicate that rents will eventually rise. Not good news for tenants and certainly not good news for Labour who are attempting to address a cost of living crisis.
In my view Labour should start again, and instead of listening to charities that have a biased agenda, they should address the professionalism of the rental industry and licence all letting agents. If any party proposed that, I’d consider voting for them, but as it stands why would I vote for a party that wants to damage my business and create havoc for the very people they are supposedly trying to help?