Labour’s Manifesto – Real Change for Renters?

Next in our series of manifesto reviews, we delve into the Labour Party's pledges to assess what they offer for private renters.

Security of tenure

The party has pledged to introduce:

Open-ended tenancies and an end to section 21

Section 21 of the Housing Act allows landlords to evict tenants with just two months’ notice without giving a reason, and is a leading cause of homelessness. Ending Section 21 will protect renters from unfair evictions as a result of asking for repairs or the landlord wanting to re-let. Both Labour and the Conservative party have pledged to abolish Section 21, so the question for renters at this election is over what they plan to replace it with. Labour have proposed indefinite tenancies, which will give renters the security they need, alongside flexibility should they need to end a tenancy. We’ve long been campaigning for the abolition of Section 21, and we’re glad that policymakers are listening.

Safe and decent homes

Labour’s manifesto promises:

We will make sure every property is up to scratch with new minimum standards, enforced through nationwide licensing and tougher sanctions for landlords who flout the rules.

A further press release on Monday promised:

annual ‚Äòproperty MOTs’ for landlords, with fines of up to £100,000 or forced repayment of rent if their properties are found to be sub-standard.

Giving councils greater powers to administer larger fines and issue Rent Repayment Orders is welcome, given that fines are rarely large enough to act as an effective deterrent, and Rent Repayment Orders are rarely used. To effectively enforce against rogue and criminal landlords councils need increased resources, so any measures to improve enforcement must include funding. Labour’s manifesto pledges to restore council spending to 2010 levels, but does not specify how much will be spent on enforcement for the private rented sector.

The party also promised ‚Äòfunding for new renters unions’, which would help renters organise and defend their rights. It’s unclear whether the funding would also be offered to existing unions, who are already working to support tenants.

Fairness & affordability

If elected, Labour would:

take urgent action to protect private renters through rent controls

Limits on rent increases year-on-year and within tenancies will give renters more security and prevent them from being forced out by rent hikes. However, linking the rent increase to wage inflation rather than price inflation would better ensure that rent rises reflected people’s ability to pay them.

In many areas, rent is already too high (40% of earnings or more) and further measures are needed to bring rents down to an affordable level. We do not yet know the details of how Labour’s proposed strategy to allow local areas to set further restrictions will operate, but any rent restrictions should be carried out incrementally to avoid diminishing supply.

Alongside measures to control rents, Labour is pledging to build 150,000 new council or social homes a year – the highest commitment of any of the major parties. If achieved, this policy will help meet demand for homes, making rents more affordable in the private sector. The party will also ‘give councils the powers and funding to buy back homes from private landlords’.

Like the Lib Dems, the Party has also pledged to raise the Local Housing Allowance – ‘in line with the 30th percentile of local rents’ – to ensure recipients can pay their rent. Alongside this, Labour have promised to end discrimination against tenants on housing benefit to ensure that those on lower incomes have access to housing, as well as outlawing Right to Rent checks on immigration status. They will stop people switching to Universal Credit and introduce reforms for current recipients, including ‘paying the housing element directly to landlords’.

Earlier this year Generation Rent highlighted the impact of holiday lets on taking homes out of the market with our campaign against Hostmaker’s adverts on London’s transport network. Labour has pledged to ‘give councils new powers to regulate short-term lets through companies such as Airbnb’. The party is also planning a range of tax changes including ‘a new national levy on second homes used as holiday homes’. These measures would help encourage landlords to keep homes in the long term market.

In its costings document the party sets out plans to reform Capital Gains Tax to treating an increase in a property’s value in the same way as an increase in income from work. Ensuring that income from property is taxed at the same level as salaried income will help discourage property owners from viewing their houses as assets rather than as homes for those who need them.

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