Landlords in the UK are coming under fire from all directions, as both Labour and the Conservatives have come out strongly in the fight to control the private rental sector. At the Conservatives’ annual conference, communities secretary, Sajid Javid, said private tenants will have greater rights under new proposals to crack down on rogue landlords. The government has already introduced licensing schemes in its bid to sift out the unprofessional landlords. Now the Tories have unveiled new measures which would make all landlords join an ombudsman redress scheme. It also intends to bring in new laws that would mean all letting agents would have to be registered, which would prevent unqualified or unprofessional operators.
In the red corner, Jeremy Corbyn said a future Labour government would bring about a rental revolution, reforming the housing market and controlling rents. Party policy already stipulates that they would lengthen tenancies to five years and introduce inflation-linked controls on rent rises, but Mr Corbyn wants to take this a step further and directly limit rent, based on models in other countries. Landlords argue this will make the housing shortage a lot worse, with Residential Landlords’ Association policy director, David Smith, saying that rent controls have been shown to stifle investment and reduce supply, historically.
Instead of introducing further controls which could potentially drive landlords away, it would make more sense to build new rental stock, so there is sufficient supply of decent properties for tenants. Landlords already face increased charges, such as the stamp duty surcharge on additional properties, along with changes to tax relief and mortgage restrictions.
Indeed, these financial changes are already having an effect, with reports showing the UK is now among the worst countries in Europe for buy-to-let investment, because of the rise in stamp duty. Britain has fallen down the league table of the best EU countries for landlords, from 15th place to 25th. Over the past 12 months, average yields have fallen from 4.91% to 4%. The table has been produced by international payments experts, worldFirst, based on government statistics and surveys. The changes have put Britain in the bottom five countries in Europe for landlords. Worst performers are Austria, Croatia, France and Sweden. Top of the league is Ireland, with an average rental yield of 7.08%, while the Netherlands, Malta and Portugal are also near the top of the table.