Landlords hit hard if Labour win Election

Labour have announced they will put a cap on rents in the private sector if they are in power after 7th May. Ed Miliband has announced that rent rises will be pegged to the Consumer Prices Index. Landlords and Letting Agents would have also to disclose the rent paid by previous occupants in order to deter new rent rises.   Miliband will promise to penalise landlords whose properties do not meet basic standards by removing the “wear and tear” allowance from their tax relief which allows landlords to offset 10% of annual rental income against the depreciation of furniture and appliances. This is in addition to announcements already made that they would make the tenancy agreement a default three year term rather than the usual 6-12 months despite a wealth of information that shows it is the tenants themselves who prefer the shorter tenancies. Labour will also scrap letting agency fees charged to tenants – as some of these are fees that letting agencies have to pay third parties (tenant referencing agencies etc) it will force the agencies to charge these costs elsewhere.   Critics have warned that landlords would refuse to invest in their properties and it could lead to a shortage of housing. The Royal Institution of Chartered Surveyors say “We do not recommend that a government introduces a ceiling on rent increases”.

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