Find out: Can the Labor Party truly win over landowners with love?

Given Labour’s predilection for attacking landowners (although the current Conservative government needs no encouragement in this regard), a Labor government would be expected to redouble its attacks on landowners. But will they do it? Will the new shadow housing minister, announced this week as Angela Rayner, become a reality? Will she grasp the reality of the problem?

It will be a long time coming, but Labor could see the light in the private rented sector (PRS)

Harry Phibbs writing for ConservativeHome says,

“…socialists in general have a tendency to want to get rid of something without giving much thought to the practicalities of replacement. The opposite criticism could be made of conservatives, who are temperamentally pessimistic, too passive in accepting what officials tell them, and too deferential to the status quo.”

One group that true socialists have traditionally wanted to “crush” has been the rentier class, and “fat” buy-to-let landlords fall right into their crosshairs in that regard. But even this Conservative government has joined the fray, making life quite difficult for small landowners, to say the least.

The small owner

In England, private rental housing is mainly provided by small investor landlords. Individual owners (85%) own between one and four properties, and just under half (45%) own only one rental property. The remaining 15% of individual landlords own five or more properties, according to the latest available English landlord survey.

The small landlord is a huge source of housing. They provide their own capital to buy, rent, build and renovate properties, so that suitable rental accommodation is available to those who need it: young professionals, increasingly also young families, singles and older couples, and even Pensioners form a large group of tenants now, and there are very low incomes and poor people.

The need for profit

Naturally, landlords need to charge market rent and make a profit – a dirty word in the far-left Marxist camp. It is not the homeowner’s fault that property values ​​have increased to the point where most young people around the world are struggling to buy a home.

Attacks on owners can only have one result: they leave the market. This exodus decreases supply and raises rents. That’s exactly what has been happening. The National Landlords Association reports that more than 150,000 properties left the buy-to-let sector last year.

According to Paul Samplina of Landlord Action, in a recent podcast shows that the increases in bailiff evictions last year were as follows:

– Section 8 evictions increased by 27%

– Expedited Section 21 evictions increased by 47%

– Expedited Section 21 evictions in Wales increased by 157%

– There has been an increase of 275 in bailiff warrants

– Evictions have slowed due to a lack of bailiff capacity and personal protective equipment.

– The social/temporary housing crisis in local authorities is also stopping evictions

Owners selling

Much of this increase is now due to owners wanting to sell. Rents are higher than ever and so is the unpopularity of the private landlord in the public eye.

Has no one in the government so far, or those across the aisle on the Labor benches, studied elementary economics 101. The new establishment intelligentsia that dominates Whitehall, on both sides, are said to have studied PPE at Oxford? Maybe they only read Marx?

With mass immigration putting even more pressure on housing, reducing rents will only be achieved by increasing housing supply, but a sclerotic planning system puts an end to that. Given the right incentive, small landlords will find ways to provide their own capital, provide the housing they need, and compete for tenants. They won’t do it without incentives.

Enter Labor MP Sir Chris Bryant, MP for Rhondda, who has produced a new report “The new housing crisis: in the Rhondda

In Wales, the Labor government has been particularly keen to “attack” its landlords. But the eagle-eyed Sir Chris has discovered that the policies he has been pursuing in the Welsh Parliament have caused some problems, to put it mildly. His efforts have produced a report which, unsurprisingly, concludes that, as Harry Phibbs says, there are “far fewer properties to rent”.

Sir Chris says:

“Landlords lack incentives to invest in the rental market due to rent caps, reduced tax relief for buy-to-let landlords and rising maintenance costs. This has led to a decline in the number of new homeowners entering the market, resulting in a shortage of rental properties for those who cannot afford to buy. “Planning permit processes can also be long and expensive, and there are often restrictions on building in certain areas, making it difficult for developers to build new rental properties in areas where there is high demand.”

Hallelujah, has the penny finally dropped?

To say there is a crisis in the property market in South Wales is an understatement.

Bryant goes on to say:

“On a buy-to-let property, you must pay tax on the rental income. You pay different rates depending on your income, between 20 and 45 percent. You must pay stamp duty when you buy the property and capital gains tax when you sell it. Previously, borrowing money through a buy-to-let mortgage could be tax advantageous.

“However, now homeowners can no longer deduct any of their mortgage expenses from their rental income to reduce their tax bill, and the credit is only refunded at the base tax rate of 20 percent, not the top tax rate. This means that homeowners who are higher rate taxpayers will pay double what they had to pay before 2017.”

That’s not the only problem, as Bryant goes on to say:

“There are concerns that landlords will leave the sector if no-fault evictions are abolished entirely. The process to evict tenants and be able to buy and sell properties will be more difficult and the process longer. “The UK Government plans to scrap no-fault evictions in the Tenant Reform Act.”

Wow, what a revelation!

So do the Conservatives, who are hell-bent on abolishing the assured short-term tenancy regime, scrapping the unpopular Section 21 eviction (something the media and housing charities among them have created a status of outcast) and introduce indefinite leases. They are going down exactly the same path that this Labor MP is now warning against!

Not all owners are “big shots”

We have long since left behind the traditional land-owning aristocracy, the absentee landlord and, indeed, the Scrooge-like Rackman landlords who throw widows and orphans onto the streets. Most current homeowners are middle-income earners who have invested in property because there have been few alternative returns from banks and building societies.

Property has been, or has been, a safe bet, producing good income with regular capital growth: an ideal vehicle to build an alternative pension fund for those who do not have the benefit of an indexed pension with which our civil servants publics are blessed. By providing this valuable housing resource, landlords provided much-needed rental housing without the need for government funding.

Chris Bryant says:

“Many ‘buy to let’ properties had been purchased to provide retirement income for owners with only one or two properties to let. “Such landlords assumed they could continue to deduct the interest costs of their buy-to-let mortgages from rental income, and that tenants receiving housing benefits would see their benefits rise in line with inflation.”

The UK Government has created a hostile environment for private homeowners, but in Wales, as in Scotland, those devolved parliaments have placed additional burdens on their landlords, as well as on housing associations offering social housing.

“The new Welsh government Wales Housing Quality Standard 2023 “It has raised the benchmark that rental properties must meet in a way that many Rhondda properties cannot,” says Sir Chris Bryant.

He continues:

“Dorms now must meet a minimum space requirement. As most properties in the Rhondda were built long before these regulations came into force, the rooms in a number of properties are too small, making them illegal to rent and alterations impossible or prohibitively expensive.”

The Welsh Government has also expanded the right to accommodation, through local authorities, while imposing policies that reduce available accommodation:

“The Welsh Government’s initiative to end priority needs, although well-intentioned, has led to a sharp increase in the number of households considered priority. Whereas previously, local authorities were only required to house those deemed “eligible homeless and in priority need”.

“The amendment to the “Priority Need Order” imposed a new duty to accommodate those considered homeless. Using Rhondda Cynon Taf County Borough Council as an example, the number of applicants the council now has a duty to assist by providing temporary and permanent accommodation has increased by 50%.”

virtue signaling

Welsh Government politicians have been going overboard with their virtue signalling, setting all the tenancy rules in a nice new Rental Housing (Wales) Act 2016. While Harry Phibbs was writing for ConservativeHome says:

“Each proves to be more “careful” than the last by demanding that ever larger rooms be found for ever greater numbers of people. “Then leave it to some poor thing in Rhondda Cynon Taf County Council’s housing department to deal with the impossible task of implementation.”

Could Bryant’s comments simply be a sign that the Labor Party is starting to see the light and face the harsh realities of the housing market? The workers may never learn to love the landlords; It’s probably not in their DNA, but they may have swallowed the fact that attacking owners is counterproductive.

Harry Phibbs reports that even Labour-dominated London councils are bemoaning the shortage of rental housing resulting from the extra costs and burdens imposed on landlords.

London Councils represents London’s 32 councils and the majority of them are Labour.

Cllr Darren Rodwell, Labor leader of Barking and Dagenham Council, said:

“Action on this issue cannot wait and the government must intervene to resolve this crisis now.” “Dwindling supply” has left councils facing “increasing pressures from homelessness”.

Punishing the landowners has been very effective, it is driving them away. But the consequences of the actions of politicians, apparently on both sides, were never fully analyzed.