Britain’s Labour Party pledges rent controls

on Apr 27, 2015

Britain’s Labour Party has pledged to introduce rent controls in the case of a win in next month’s election. In one of the most far-reaching changes to the buy-to-let property sector, the party would bring in standard three-year contracts between tenants and landlords while also obliging landlords to disclose previous rent charges in order to prevent above-inflation hikes in rent. The party also pledged to cut tax relief for ‘rogue landlords’.

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Those with properties that do not meet basic standards will face the loss of half their buy-to-let tax relief, the so-called ‘wear and tear allowance’, which allows landlords to offset 10 percent of annual rental income against the depreciation of furniture and appliances.
Labour leader Ed Miliband said yesterday that the move is designed to win over middle-income voters who have been priced out of the housing market and middle-aged parents whose children cannot get onto the housing ladder. “Too many people are struggling to meet the costs of putting a roof over their head,” Miliband said.
The changes, to be introduced during Labour’s first year of office, would apply to England only, where an estimated 11 million people rent their homes. The Conservatives oppose rent controls, believing it is wrong to interfere in the free UK property market and that building more houses is the way to keep prices down.
Labour’s pledge drew a negative reaction among landlords, who said that the proposals showed a lack of understanding of the economics of the buy-to-let market. Business groups also expressed concerns that the measure would deter investors. “Institutional investors, which are critical for building new homes, could be discouraged by plans to intervene in the rental market,” Rhian Kelly, director for business environment at the Confederation of British Industry, said as quoted by the Financial Times yesterday.


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