Everything Labour touches turns into disaster
No politician will ever lose votes by having a go at landlords.
They’re the pantomime villain of every local political party meeting. Even the Conservatives were eager – when they weren’t rolling out trans ideology and Diversity, Equity and Inclusion policies across the country – to paint landlords, especially private ones, as the cause of untold misery among the populace.
Labour’s Tenants’ Rights Bill won’t make the owners of rental properties any more beloved – that is beyond the power even of this government – but it will aim to “level the playing field” of the rental market, giving tenants oodles of new rights that will transform the rental sector for the better.
That it will do nothing of the sort, however, is one of those flaws you might have hoped ministers would have spotted before now.
First the good news. Bad landlords (and unfortunately, there are many out there, including one sitting just behind Keir Starmer in the Commons) will be forced to make essential repairs to their properties within tight timescales instead of arbitrarily kicking tenants out for complaining in the first place. Other measures include a blanket ban on Section 21 “no fault evictions”, where landlords can get rid of tenants for no reason, simply by issuing two months’ notice.
Naturally the Bill as it stands doesn’t go far enough for housing campaigners, who want rent controls, in the belief that the disaster they have wrought in other countries won’t be replicated here, for some reason. But so far the government has set its face against this proposal (although it’s early days yet). Ministers hope that the shortage of available homes for rent – and therefore the inflation-busting rents that tenants have to pay – will be ameliorated by an increase in the number of new homes this government is committed to having built.
They will hope in vain. Claims that new-build homes will sort out the rental sector stand up to no scrutiny whatsoever. It’s certainly true that the exorbitant rent that landlords are able to charge, particularly in London and the south east, is caused by a lack of homes available to rent. So why has the government contrived to make that shortage even worse?
A senior official at Homes England told me during the general election that the (then) Labour opposition’s plan to build 300,000 new homes a year – exactly the same target the Conservative government had before it ditched it – was simply not able to be met because the private sector, which is expected to deliver this target, doesn’t have the funds or the capacity, even if England’s absurdly complex planning laws are reformed.
So the only way of making more homes available to rent in the numbers and timescale needed is to make more private properties available for rent. But the Tenants’ Rights Bill contains not a single measure likely to reverse the disastrous trend of recent years that has seen thousands of landlords depart the market. More restrictions on who landlords can rent their own properties to (they’re about to be told they cannot favour working professionals over benefit claimants) is hardly going to encourage new investment in the sector. More regulation equals fewer homes to rent. That is an ugly equation, but there we are.
Landlords themselves, meanwhile, are becoming increasingly sick of being painted by successive governments as the perennial villains of the piece. Britain has a deeply unhealthy culture towards people who have enough money to spend on a second property as somehow beyond the pale; there is even more contempt reserved for those with the business acumen to borrow to invest in a number of properties, to earn an income from the rent and then to sell them for a tidy profit.
While this government (and, inexplicably, the last one too) might muse about the prospect of forcing the free market to do its will, it might be more productive to recognise a fact of life: the higher the availability of a commodity, the less consumers will have to pay for it. Scarcity means high prices, abundance means low prices. More burdensome regulation, however well-intentioned, will mean fewer homes for rent which, in the medium term, will mean higher rents and more homelessness.
Reducing some of that regulation, however, in particular revising the financial rules that have made being a landlord so much less profitable in recent years, would result in more homes being available and lower rents.
As Rachel Reeves prepares her budget for next month, landlords are already preparing to depart the market rather than take another hit on capital gains tax, which they expect to be hiked. That would mean another blow to the rental market and to the hopes of renters. Yes, landlords will take a hit, and ministers can raise a glass to that. But if the consequences for the people most in need of lower-cost rented accommodation are even worse, where is the justice in that?
A disillusioned Labour member said on X yesterday that he had been surprised (he did not say “disappointed” but it was there in every syllable) to discover that the late, great socialist MP Michael Meacher had been a landlord who had earned a considerable sum from a number of properties, as if displaying any level of business nous was incompatible with serving on the Labour benches.
Maybe it is. And that’s a scary thought.