We recently conducted the largest residential landlord survey in the UK ahead of this year’s General Election, to find out what property owners think of each party, and how they intend to vote. You can read the full study here, but the overall gist is that the majority of landlords feel most secure with the Tories representing them, and that many others are switching their allegiance from Labour to UKIP. And it isn’t difficult to see why.
The Labour party certainly seems keen to pander – sorry, I mean appeal – to tenants, with its proposed changes to the lettings sector and rent-to-own schemes. And at Rentify, we admit to heartily approving of Ed Miliband’s promise to slash lettings agents’ hefty fees, which fulfil no real purpose other than to further line agents’ pockets. But what of landlords?
“Mr Miliband’s vison of three year tenancies, rental caps, and the banning of “rip-off” letting agent fees, is designed to win votes by putting forward the image of badly treated tenants and greedy landlords,” says property expert Luke Gidney. “It is fair to assume that if Labour’s stance appears to be gaining them some precious votes then the Tories, Lib Dems and maybe UKIP will put together a similar sounding argument in a bid to gain a slice of tenants’ support. But this can hardly be a way to address the private rented sector.”
Acknowledging the needs of tenants is a great place to start, but Miliband needs to engage with landlords too if he is to fully understand the lettings sector. And all the signs suggest he has a limited comprehension at best. He benignly suggested three year tenancies, when the truth is a great many tenants don’t stay in a property any longer than a year. And his ideas about rent control are intended to appease tenants, sure, but they betray a simplistic view of landlords as money-grabbing land-owners.
According to the Residential Landlords Association, three out of five landlords would consider leaving the private rented market if the government introduced rent controls, and would in all likelihood leave tenants worse off. The RLA conducted a survey of over 1,000 landlords, and 75 per cent of respondents indicated that they had either reduced or frozen their rents in 2014, and over 65 per cent intend to do so in 2015.
“These results blow a hole through the myth that rent controls would be good for tenants,” says RLA chairman Alan Ward. “At a time when tenants need more choice over where they live, state-controlled rents would choke off supply, increase rents and reduce quality. It would be history repeating itself.”
This is because landlords know their market better than Labour. So maybe Labour should talk to more landlords. And more importantly, listen.
George Spencer is CEO at Rentify.