Lib Dems want to introduce landlord licensing and rent controls

The Liberal Democrats have pledged to give private rented sector (PRS) tenants and landlords a ‘fair deal’ in their newly published policy paper which would see three-year tenancies and ‘rent smoothing’ – or rent controls – being introduced.

Plans would also see landlords having to apply for a licence – ‘much like getting a driver’s licence’ – before they could rent out a property, and the system would see a national register of landlords being created.

Landlord licensing would see service quality being improved, the party claims, and ‘bad landlords would have their licences revoked’. Landlords with holiday lets would also need to be licensed.

The proposals also include a pledge to ban section 21 ‘no-fault’ evictions.

The policy paper – ‘Tackling the Housing Crisis’ – comes after the Lib Dems’ annual conference in Bournemouth, alongside the publication of other policy documents.

No mention of the party’s plans for the PRS

However, party leader Sir Ed Davey made no mention of the party’s plans for the PRS in his speech on the final day of the conference.

In their policy paper, the Lib Dems state that England’s PRS is ‘unfair and under-regulated’ and want to introduce powers to tackle bad landlords and tenants.

They say: “England’s private rental sector is fundamentally unfair and under-regulated. For decades, the assumption has been that private rental was a temporary stop gap before homeownership, or a lifestyle choice.

“This is no longer the case; millions of people, especially the young, ethnic minorities and those on lower incomes, are stuck permanently in private rentals, with no prospect of the affordability of a council or housing association home or the security of homeownership.”

Bad landlords would have their licences revoked

Under its proposed plans, all landlords would need a licence to rent out their property and there would be a national register of landlords – maintained by local councils.

The party says to gain the licence, landlords must meet minimum standards on safety and service provision. The process would set out what is required of landlords and would be administered locally.

The policy paper says: “We do not believe requiring landlords to get a licence and meet minimum standards would deter investment in the sector.

“We believe a licence would drive up the quality of service provision in the private rental sector, as bad landlords would have their licences revoked or denied if they failed to meet the requirements.”

The new licensing system would also require all rental properties to meet national minimum standards on safety, the environment and service provision. There would be a specific focus on ending the ‘national scandal’ of damp and mould in homes.

Ten years to reach an EPC of B

The party also says that all rental properties will have to meet high environmental and safety standards under energy efficiency requirements for landlords it would introduce.

The party also plans to remove the proposed £10,000 cost cap on the energy performance certificate (EPC) improvements that were scrapped by the Prime Minister, Rishi Sunak.

The party would give landlords five years to reach an EPC rating of C, and 10 years to reach an EPC B rating.

The party claims a survey from 2021 indicates that 8% of private renters in England had received a no-fault eviction that year, while 32% were concerned they would be asked to move out in the next 12 months.

The paper states: “It goes against the liberal principle of equality that landlords have the power to make someone homeless on a whim. We would scrap Section 21 of the 1988 Housing Act, ending no-fault evictions.”

Eviction rules will also be changed so that landlords can only evict tenants in specific and proven circumstances, such as failure to pay rent or damaging the property.

Plan to introduce ‘rent smoothing’

The party says to prevent landlords from evicting tenants and increasing rents, they plan to introduce ‘rent smoothing’ – which is a form of rent control since rents can only increase by the Bank of England Base Rate during the contract period.

The Lib Dems say: “The interest rate, rather than inflation, is more relevant to the costs a landlord faces since property is a financial and investment asset rather than a labour-intensive business. This would not lead to the harms caused by blanket rent control, as landlords could increase rents at the end of a contract period.”

The party also plans to extend the default tenancy from one year to three years – and says that three years ‘strikes the right balance’.

In the policy paper, the party says: “Tenants, especially vulnerable people and children, need stability, whilst not starving the rental market of available properties. We believe three years strikes the right balance.”

The paper also says that the Local Housing Allowance (LHA) would be linked ‘to the real level of local rents’.

The policy paper ends with this statement: “We do not see evidence that the proposals outlined here would significantly reduce the availability of privately rented properties on the market. Bad landlords who exploit their tenants may leave the market – but ultimately their property would either be sold to better landlords or to new owner-occupiers.”

You can read the full Housing Policy Paper on the Lib Dems website.

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