Labour’s policies put housing investment at risk and lack crucial detail

The British Property Federation (BPF) has voiced its concern over Labour proposals to tackle problems in the private rented sector, over what will be seen as rent controls and a lack of detail in its policy making.

Outlined today by Ed Miliband, Labour’s reforms to the private rented sector would introduce three year tenancies, enforce a ban on letting agent fees and impose a ceiling on rent increases.

Ian Fletcher, Director of Policy at the British Property Federation, said:

“There are many institutions investing in UK housing, or on the cusp of it, that will be feeling extremely nervous this morning. Those who are investing already are very receptive to offering longer tenancies and many are doing so and the Labour Party’s aspiration on that in itself is not objectionable, but the rent control aspect of this announcement makes no sense. Good landlords will be getting a perverse message that if you are providing a premium product the most you can expect is the ‘average’, whilst bad landlords with sub-standard accommodation can find another justification for charging over the odds. There are already mechanisms to deal with dodgy rents on longer tenancies via Rent Tribunals and Unfair Contract Terms.

“If Labour doesn’t want to alienate the one million plus landlords in the UK it must also be more forthcoming on not only allowing eviction for reasons of sale, or rent arrears, or anti-social behavior, but how that will work in practice and whether our courts will be resourced appropriately, plus the spending commitment that entails. Keeping as many possession proceedings out of court, and providing a guaranteed timescale when cases go to court would be a good start. The Party has promised it will work constructively with the sector on these sorts of issues, and that is to be welcomed.

“The private rented sector has attracted phenomenal investment into housing over the past two decades and with institutional money now entering the sector there is great opportunity for it to contribute towards Labour’s aspiration of 200,000 additional homes per annum, which is the bare minimum the country needs. We welcome that housing is high up the Party’s agenda, but it won’t achieve its objectives if it has investors in new housing delivery doing a rethink and won’t get away without filling in the blanks in its policymaking for too long.”