Wednesday, 29 April 2015

Labour's Housing Policies Could Make 1000's of Sunderland Tenants Homeless

I usually try to keep party politics out of this blog but this is so important that I'll make an exception...under a Labour Government, Landlords will be forced to commit to three-year tenancies and will be banned from raising rents above inflation - the consequences of this will be disastrous

If Labour hold a position of power following next week's election they have promised to rush through the legislation in the first Queen's Speech, so this policy will be implemented very quickly indeed

Many Landlords all across the UK will find this deeply unsettling and faced with this will choose to sell up

Based on 2011 Census figures there are currently 12,564 privately rented properties in Sunderland

If just 10% of Sunderland Landlords decide to withdraw from the rental market because they are uncomfortable with Labour’s proposals and feel unable to manage their risks – particularly when mortgage rates inevitably rise - that will equate to over 1,200 homes no longer being available to the private rented sector in Sunderland

I would like to know where Ed Miliband suggests these 1,200 Tenants should live? 

These Tenants will either become homeless or face having to move in with family and friends on a long-term basis

Aside from this, you don't need to be a student of economics or a property expert to work out what is likely to happen to rents should the demand for housing stay the same yet the supply of available rental properties be dramatically reduced?

Or thinking this through logically...what would be the likely impact on an already fragile housing market if there was a significant & rapid increase in the number of properties on the market for sale, given relatively static demand from buyers?

Turning to another of Labour's hair-brained housing policies - their proposed ban on Tenant Fees - admittedly this looks attractive to Tenants at first glance but it will inevitably lead to the cost for this essential part of the lettings process being passed on to Landlords and Landlords raising rents to offset this increase in costs

This has been the case in Scotland where such legislation has been in place for over a year (recent research shows that since the abolishment of Tenant Fees in Scotland, Tenants pay on average an extra £159 per year more than before the ban) Tenants in England will end up paying more in the long run. Brilliant. Thanks Labour & Shelter, I'm sure "Generation Rent" will be very grateful for that in a few years time...

Looking at housing proposals for new builds from all the main parties, the most that any party has pledged is 300,000 properties in the next five years so clearly this figure will not even scratch the surface of being able to satisfy current demand...which is the real reason that we’re facing a housing crisis

Let's not forget that it was the last Labour Government who presided over the financial crisis of 2007 and 2008, which resulted in a credit crunch that has left millions of people unable to obtain mortgages or save for a deposit to buy their own home

It is therefore very shortsighted and totally irresponsible of Labour to propose policies that will drastically reduce the number of available rental properties

Landlords are very tired of being made to look like criminals who are constantly looking to rip off tenants and provide low quality housing - in reality this just isn't the case

In our experience, 99.9% of landlords are decent people that provide decent housing for tenants on a long-term basis

Belvoir’s national rental index confirms that in most parts of the country there has not been the major inflation-busting rental increases that Ed Miliband speaks of and this is certainly true of Sunderland

If we look back and apply Labour’s proposed inflation rule for rental increases, the average rent in Sunderland would have risen from £524pcm in 2008 to £625pcm today rather than the current £591pcm

This is just one example of how Labour’s proposals are full of loopholes and have clearly not been thought through, but merely put forward as a calculated populist move to attract votes...and don't address the real problem which is an acute shortage of housing!

One thing is certain - Labour’s policies will not raise standards or increase Tenant security, instead they're likely to cause a perfectly avoidable housing crisis that may result in 1000's of Sunderland Tenants with nowhere to call home

1 comment:

  1. You make money by helping private landlords make money. Your take on this is biased and scaremongering. As a private tenant I know the value of being able to rent a property on a long-term basis, and I know the frustrations of living in poorer quality housing than housing association tenants are entitled to. If 10% of private landlords put their buy-to-let properties on the market for sale, 1) not all will sell - so they will continue to let them out; 2) some might be purchased by housing associations - can only be a good thing for tenants; 3) if house prices fall as you predict, many private landlords will not be able to afford to sell - so they will continue to let them out. I agree that landlords need sufficient protection to be able to raise rents if they are affected by a rise in interest rates. Quite frankly - the only person you are worried about here is yourself - your income - and your clients' income, but only because yours is dependent on theirs. It's all about you. No need to ask where you sit on the political spectrum.