Why a Labour win is a disaster for homeowners, landlords and tenants
02-26-2015
Mansion tax is "rich-bashing" and pure "vote winning", says property expert
Strong tenant demand is causing rents in some regions to rise sharply Photo: AP
Anna White
By Anna White, Property correspondent
A Labour victory, or a red-led coalition, could be detrimental to the housing market, reducing the supply of homes and deterring overseas buyers from investing in London, property experts have warned.
Two thirds of UK landlords will leave the private rented sector if Labour wins the general election in May and a rent controls policy is introduced, limiting the number of affordable rental properties, according to new research from the Residential Landlords' Association (RLA).
Ed Miliband is expected to set out proposals for three-year tenancies, with only limited rent rises permitted in that period, in line with inflation.
However, data in the most recent English Housing Survey shows that between 2008 and 2009, and 2012 and 2013, social sector rents increased by over 25pc.
In comparison, private sector rents increased over the same period by 6.5pc. Inflation, as measured by both CPI and RPI, over this period was around 16pc.
Alan Ward, chairman of the RLA, has warned that proposals for rent controls will leave tenants worse off with less choice, reducing the supply and opening up the market to dodgy landlords.
"This is just window dressing and does nothing to address the supply side issues...or get rid of crooks," said Mr Ward.
“At a time when tenants need more choice over where they live, state-controlled rents would choke off supply, increase rents and reduce quality. It is a tax on tenants.”