How NOT to win friends – or votes!

If you want a lesson in shooting yourself in the foot, you don’t have to go much further than yesterday’s ‘right to buy’ announcement from the Labour party. Labour has pledged to introduce a new policy: if it wins the next general election it will give private tenants the right to buy the homes they live in.  

Shadow Chancellor John McDonnell framed the proposal as a response to the problem of “overcrowding” and landlords “who don’t maintain their properties”. This is a hammer to crack a nut. And it has produced the expected response from landlords and their member organisations. This is a badly considered plan and its timing is terrible. As we all hold our breath to see whether or not we will be facing another General Election in a few weeks’ time,  Labour just lost the votes of landlords around the country.

 Most landlords provide a well-maintained home for their tenants – and are right to expect a decent return for their investment. They are not providing social housing. Bad landlords are not the norm and as David Smith from ARLA says: “If there was to be any chance of this becoming law, there would be a mass sell-off of properties in advance”.

It is also doubtful, if the aim is to allow tenants to buy their rented home for below market value, whether or not lenders would be willing to provide mortgages on that basis. The housing market is predicated on market value, not on arbitrary sums set by the government.

Smith thinks Labour’s plans are effectively a kind of compulsory purchase that is entirely unacceptable and ultimately unworkable, reducing the availability of homes to rent and destroying the viability of the PRS. Spot on, we say.

Giving council tenants the right to buy in the 1980s ultimately produced a crisis in social housing, which successive governments have failed to address. The problem has spilled over into the private rental sector which now has to find homes for tenants who would, in the past, have been housed by their local authority. A well-regulated, strong PRS is an asset and responsible buy-to-let landlords are badly needed in a country with too few affordable homes to buy.

“Time to emigrate,” says Ringley & PlanetRent Group CEO Mary-Anne Bowring.  “Personally, I am fed up with out-of-touch politicians stereotyping private landlords.  There are some rogue landlords but these are the minority – by and large, private landlords are hard-working individuals trying to build a nest egg for their children or their retirement.  The Tories have squeezed landlords with mortgage tax changes, reduced their income by banning up-front fees and even expect them to clean up after tenants at the end of the tenancy!  Now Labour wants to dispossess them of their property altogether – I do wonder seriously, who is fit to run the country?”

In our opinion, the Labour party should turn its attention to finding ways to deliver a major housebuilding programme that would provide jobs, as well as homes for people. Attacking landlords and their ability to provide those much-needed homes is an own-goal of momentous proportions.    

Better together – merger will give landlords a stronger voice

Great news for private landlords last week. The two largest landlord organisations in England and Wales, the National Landlords Association and the Residential Landlords Association, announced in the press on Friday that they plan to merge.

The newly unified organisation will be called the National Residential Landlords Association (NRLA). It will have a membership of more than 80,000 landlords, who between them are thought to manage around half a million properties. That’s about 10% of the private rental market.

We think a single organisation focused on representing landlords is a great idea. The NLA and RLA do a huge amount of work in parallel. Bringing them together gives landlords a much stronger voice – something they badly need in the current climate.

Every single survey carried out in the sector finds landlords frustrated and despondent. Margins are being hit at both ends. The combination of the ban on upfront tenancy fees, the squeeze on mortgage interest tax relief and the threat of Section 21 being withdrawn is a serious threat to people’s livelihoods. It threatens to force landlords out of the market when good quality rental property is badly needed around the country. And all this is happening while our beleaguered buy-to-let landlords are still expected to provide the quality housing for tenants that successive governments have failed to deliver themselves.

Add to this today’s announcement that, if elected, the Labour party is considering introducng a right-to-buy for private tenants (more on this later in the week) and it’s pretty clear why landlords need robust support from a member organisation that can effectively represent their interests.

The stronger a voice that private landlords can have to put their case to government, the better – and we wholeheartedly support this merger.

The plans have been approved by the boards of both organisations and the new association is expected to launch officially on 1 January 2020, assuming the merger is approved by members later this month. Watch this space – we’llkeep you posted.