Focusing on rent control will not solve demand for private rented property, Propertymark

Propertymark is seeking clarity from the Labour Party on how it plans to achieve its aims outlined in the latest review of the private rented sector.

The Labour Housing Group’s Independent Review of the Private Sector, published at the Local Government Association in London on 15th May, includes five main aims.

These include increasing the supply of social housing through a ‘holistic approach’ and creating a National Landlords Register.

Other pledges are ending no-fault evictions, implementing a system of rent ‘stabilisation’ with annual rent increases, and preventing landlords from moving to short-term and holiday lets.

While Propertymark welcomes measures such as building more social homes, it calls for more clarity on how Labour will achieve its goals, including ending no-fault evictions, rent stabilisation, and preventing landlords from shifting to other sectors. Additionally, there is no mention of ensuring property agents are appropriately qualified and regulated.

In January 2023, Councillor Stephen Cowan of the London Borough of Hammersmith & Fulham stated he would review the private rented sector for Labour in anticipation of a possible general election victory. The review aims to ‘transform’ the UK’s private rented sector with input from various groups, including academics and trade unions.

Labour has indicated that it would extend Awaab’s Law, which addresses issues like mould exposure that led to the death of a two-year-old in a social flat, to the private rented sector if they come to power. Prior to the review’s publication, Propertymark urged Labour to reverse former Chancellor George Osborne’s decision to end mortgage tax relief for landlords. This change has led to rising rents, as landlords cannot offset financial costs against tax liabilities.

Timothy Douglas, head of policy and campaigns at Propertymark, and Nathan Emerson, CEO at Propertymark, met with Councillor Cowan and contributed to the review on behalf of Propertymark members. In Propertymark’s 2019 report on private rented sector costs, 68% of agents reported paying for expensive repairs that exceeded everyday maintenance costs. Additionally, a 2022 Propertymark report indicated a significant decrease in available rental properties, leading to higher rents due to increased demand.

Douglas said: “The Private Rented Sector Commission’s Independent Review into the Private Rented Sector in England sheds light on much needed areas of reform, including increasing standards and improving affordability. Propertymark is pleased to see a focus on professionalising the sector and equalising tax across long and short-term letting.

“However, mandatory qualifications and licensing of letting agents are key rather than minimum training requirements. The Review places too much emphasis on rent control measures without understanding the impact of rent cap measures seen in Scotland. The way to bring down the cost of renting is to increase the supply of homes to rent.

“There is also little reference to having a written tenancy agreement, compulsory inventory checks to prevent disputes, and investment in local authorities to carry out inspections and enforcement. These are fundamental aspects that policymakers should focus on to increase standards across the board.”