Labour defends rent controls pledge

Labour shadow housing secretary John Healey has defended his party from accusations that its plans to increase regulation of private landlords will kill the burgeoning build-to-rent (BTR) industry.

Labour today announced plans to force landlords to undergo a once-yearly “MOT” of their properties to check they meet basic standards, and has already pledged to bring in rent controls linking rent rises to the rate of inflation. The promises were contained in a press release from the Labour Party which pledged to put “bad landlords out of business”.

Some in the property sector have hit out at plans, saying they will make it harder for developers to build new homes designed to be rented out, a growing sector credited with bringing institutional investors in to the residential property market.

However, Healey told the Today programme that the new rules wouldn’t scare off quality landlords.

He said: “My argument is that this is a market that is failing. We don’t have rights as consumers in the same way as we would if we were buying a fridge freezer or renting a car. One in four are in poor condition – damp, cold or in disrepair or even unsafe, then this is a market which is clearly failing, it requires a government to step in.

“I’d say to the landlords that in Germany the rights and rules are stronger, but the sector is at least twice as big as it is here in Britain so it can work for tenants, it can work for landlords, and we can make private renting a better choice for those who want to or need to base their home in a private rented property.”

The British Property Federation in the summer said that rent controls would have a “damaging” impact and deter investment in to new homes, citing a Stanford University study in which landlords subjected to rent controls reduced supply by 15%, forcing prices up overall. The BPF says 140,000 BTR homes have been completed or are being built or planned in the UK, a pipeline which rent controls will jeopardise.

Jean-Marc Vandevivere, chief executive of BTR developer Platform, said Labour was right that there was an imbalance between landlords and renters in the traditional private rented sector, but that its prescription was wrong.

He said: “Rather than help renters by improving the quality or availability of rental housing, rent caps will do exactly the opposite, discouraging investment into improving existing stock or creating new rental homes. The next government should focus on increasing the supply of rented housing and one of the best ways to do that at speed and scale is to support the growth of the build to rent sector.”

Meanwhile Franz Doerr, chief executive of deposit business Flatfair, said rent controls would “only cause landlords to flee the sector” and had “been proven not to work many times before”.

Both the Conservative and Labour parties have pledged to abolish “no fault evictions”, meaning landlords will no longer be able to force tenants from their homes that are paying their rent.