Conservative manifesto sparks controversy over housing reforms

The Conservatives promise to “deliver fairness in the rental market” by abolishing Section 21 and passing the Renters (Reform) Bill.

The Conservative manifesto has a wide range of policies which the Tories claim will ensure fairness in the housing system.

However, the NRLA have blasted the manifesto saying the policies will do nothing to help address the shortage of homes to rent.

Deliver fairness for landlords and tenants

The Conservative manifesto says: “We will pass a Renters Reform Bill that will deliver fairness in the rental market for landlords and renters alike.

“We will deliver the court reforms necessary to fully abolish Section 21 and strengthen other grounds for landlords to evict private tenants guilty of anti-social behaviour.”

Despite the Tories’ previous promise in 2019 to abolish no-fault evictions, the Renters (Reform) Bill failed to pass before the general election.

Reaction to Conservative manifesto

Ben Beadle, chief executive of the NRLA says the Renters (Reform) Bill should have been passed and said: “Reform of the rental market should have taken place in the last Parliament. As we said then, a balance between security for tenants and policies which retain the confidence of responsible landlords is crucial if we are to deliver much-needed homes for rent.

“That balance can only be achieved by fixing a broken justice system so that tenants and landlords can enforce their rights when section 21 ends in a timely and effective way.  As the Law Society has warned, reform risks being ‘in vain’ without investment in legal aid support and the courts.”

Sarah Coles, head of personal finance at Hargreaves Lansdown, says the manifesto offers a mixed bag for renters.

She said: “The manifesto promises a Renters Reform Bill which would end no-fault evictions and shore up tenant rights. This had been in progress before the election was called, so this is a commitment to get it back on track.

“This is fundamentally good news for renters, but comes with a sting in the tail. If it persuades more landlords to sell up, it could mean even fewer rental properties around and even higher rents.”

CGT exemption

The Tories also plan to introduce a two-year temporary Capital Gains Tax relief for landlords who sell to their existing tenants.

Many organisations have criticised the pledge arguing many tenants can not afford to buy a home.

Generation Rent is calling for a portion of the tax break for landlords selling to their tenants to be allocated towards a discount on the purchase price.

Dan Wilson Craw, deputy chief executive of Generation Rent, said: “The only new policy is a tax break for landlords selling to their tenants. To really have an impact, a portion of this tax break needs to go towards a discount on the price for the tenant, otherwise, few will be able to afford to buy out their landlord.

“But many tenants aren’t in a position to buy at all: 23,000 households faced homelessness between April and December 2023 because their landlord was selling up. Tenants should therefore have the option to nominate another buyer, such as a housing co-op or the council, who would allow them to stay. This would mean the policy not only boosted home ownership but reduced homelessness too.”

The NRLA’s chief executive also supports a similar measure to help tenants and says tax hikes under recent Conservative governments have significantly impacted the rental market.

Mr Beadle said: “Tenants who want to become homeowners should be supported to do so. Whilst incentivising landlords to sell to existing tenants has the potential to help, it will not reverse the damage to the rental market caused by tax hikes under recent Conservative governments.

“As the Institute for Fiscal Studies has warned, changes to mortgage interest relief and the level of stamp duty paid by landlords have led to higher rents and stifled the supply of homes across the private rental market. This comes at a time when the number of tenants enquiring about every available rental property has more than doubled compared with before the pandemic.”

Help first-time buyers get onto the housing ladder

The Conservative manifesto also includes plans to build 1.6 million homes by building on brownfield sites and abolishing Stamp Duty for homes up to £425,000 for first-time buyers.

The Tories also plan to introduce a new help-to-buy scheme which will provide first-time buyers with an equity loan of up to 20% towards the cost of a new build home.

The Tories say this will help first-time buyers get onto the housing ladder with a 5% deposit on interest terms they can afford.

Nathan Emerson, chief executive officer at Propertymark, said: “It is encouraging to see the Conservatives making commitment to consumers via proposals to overhaul the threshold for when Stamp Duty is applicable. Propertymark is keen to see homeownership be a workable proposition and not an aspect that is ever out of reach.

“It’s also encouraging to see strategies for the fast-track regeneration of brownfield sites and urban areas.

“However, Propertymark awaits further clarity on how any ‘Help to Buy’ scheme would assist first-time buyers when taking their steps onto the housing ladder. Ultimately, we need a fully robust supply of new sustainable housing that is keeping pace with an ever-growing demand.”

Clamp down on holiday lets

Other manifesto pledges include capping ground rents at £250, and reducing them to peppercorn over time.

The Tories also say they will ensure councils have the powers they need to manage the uncontrolled growth of holiday lets.

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