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Press release

28 NOV 2019

Labour on housing: addressing all aspects of the market

Tamara Hooper RICS

Tamara Hooper

Policy Manager

London, UK

RICS

RICS has consistently called for housing policy that is holistic and that addresses the needs of different tenures to ensure the delivery of homes for all. We are dedicated to our public interest remit, and we welcome the focus on a fair housing system laid out by Labour in their manifesto. However, we urge the next government to take a cautious approach to introducing changes that could have unintended consequences for the most vulnerable within society.

Standards, regulations and qualifications

RICS has long supported the introduction of binding standards and regulation across the PRS that will enable tenants to be aware of the minimum standards they can expect. We worked closely with Lord Best as part of the Regulation of Property Agents (RoPA) working group and support the recommendations outlined in the resulting final report.

We therefore welcome Labour's pledge to 'make sure every property is up to scratch with new minimum standards, enforced through nationwide licensing and tougher sanctions for landlords who flout the rules'. Mandatory licensing will help improve standards within the industry.

However, Labour must also acknowledge that RICS and other professional bodies already set minimum standards for our members. New licensing must exempt those who are already regulated and qualified from paying additional licensing fees. We also want to see the RoPA recommendations around qualifications and standards to be adopted in full.

Regulation, Guides, Pexels, 160518, mb
Whilst mandatory licensing for property agents will improve standards, Labour must acknowledge that other professional bodies already have minimum standards and licensing in place, and they must be exempt from paying further fees

Protecting private renters

Labour's plan contains two suggested actions to protect private renters. The first is to cap rents linked to inflation, with options for cities to cap them further. However, given the long-term nature of the housing market, attempts to link rental increases to indexing may result in greater increases than if the sector is allowed to retain flexibility.

The other suggested action is to introduce open-ended tenancies. Under current legislation, assured shorthold tenancies can be offered for up to seven years with a deed, though technically there is no maximum term length. Despite this, the most common tenancy length is 12 months.

RICS supports longer tenancies but we do not believe open-ended tenancies will be of benefit to the market overall. In the PRS, there must be a careful balance between the priorities of landlords and tenants, and this proposal will disadvantage landlords. This is likely to result in more landlords leaving the market and therefore in a reduction of rental supply.

There is also a risk that open-ended tenancies will create a two-tier system, where landlords let to tenants with more stable, higher incomes due to term uncertainty, making it harder for those who are on lower incomes or in precarious employment to find properties.

While Labour concludes that open-ended tenancies will end 'no-fault' evictions, they give no direction on how landlords will be able to remove tenants for reasons that currently fall under section 8 or section 21. Landlords must be able to evict tenants who are not paying rent or breaking the lease conditions, or if they wish to take back possession of the property.

There is a risk that any attempt to control rent increases or create uncertainty for landlords will intensify disruption within the PRS, with the possible leakage of stock into sale, which will make existing affordability issues worse.

Labour intend to undertake ‘the biggest council housebuilding programme in more than a generation’, by delivering a million homes over the next decade

Social and council housing

Labour has committed to a suite of measures that would have a profound effect on the provision of social housing in the UK. Many of Labour's housing delivery policy proposals are aimed at helping first-time buyers onto the housing ladder. They are committed to building more low-cost homes that are reserved for first-time buyers and to making Help to Buy an instrument that supports first-time buyers on ordinary incomes. They will also introduce a levy on overseas companies buying housing, while allowing locally based people to have the first pick of newly built homes.

Labour intend to undertake 'the biggest council housebuilding programme in more than a generation',by delivering a million homes over the next decade, with at least 150,000 council and social homes delivered annually by the end of the parliamentary term. They will also redefine the term 'affordable rent', which will no longer be up to 80 per cent of market rent but will instead be 'linked to local incomes.'A Labour government will seek to end the forced conversion of social rented homes to affordable rent.

The party believe they can 'stop the haemorrhage of low-cost homes' by ending right to buy. They propose that social tenants should have a greater say in the management of their homes and will declare an end to 'social cleansing by making sure regeneration only goes ahead when it has the consent of residents, and that all residents are offered a new property on the same site and terms'.

However, Labour does not outline how their housing targets will be met and makes no commitment to promote modern methods of construction (MMC). Offsite construction can help deliver housing quicker than traditional methods, while also reinvigorating the manufacturing industry. RICS strongly believes the next government must support MMC, both directly through investment and indirectly through planning, education, construction and design quality standards and programmes. New policies should be introduced to encourage construction of MMC factories in areas of high unemployment as part of the industrial strategy.

Tamara Hooper RICS

Tamara Hooper

Policy Manager

London, UK

RICS

Tamara is our Policy Manager. She is based in London and works within the UK External Affairs team.

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