Labour Party could give tenants right to buy your property
Landlords still angry about the government announcing new legislation that places an unfair burden on anyone running a rental property portfolio might be advised to take a sharp intake of breath before reading the rest of this blog.
Why? Because Assetgrove has discovered that two of the leading contenders to take over the leadership of the Labour Party have laid out radical plans for the private rental sector.
The proposals from the Labour Party’s Jeremy Corbyn and Andy Burnham follow the current government’s announcement that it will roll out controversial right to rent rules scheme to the whole of England from next month.
This means landlords will face £3,000 penalties for failing to monitor the immigration status of their tenants or lodgers.
A trial of “right to rent”, introduced in the West Midlands in December 2014, has already resulted in one fine being issued to a landlord, who is said to be appealing against the near-£2,000 penalty.
Landlords have already voiced their fears that the right to rent rules could force them to discriminate against tenants unable to prove their status if they want to play it safe, while others say they are being asked to act as unpaid border police.
The right to rent rules are not the only hammer blow David Cameron’s government has inflicted on landlords since it won power in May.
From April 2017, landlords will no longer be able to claim tax reliefs worth 40% or 45% of the interest payments on their buy-to-let mortgages. Instead, the maximum tax relief will be set at 20%.
Rental property owners will also lose the right to automatically claim 10% of the rent against wear-and-tear costs. From April 2016, landlords will only be able to deduct costs they actually incur.
Labour Party proposals
It is not just the government that is making landlords’ lives more difficult.
Jeremy Corbyn, who is among the front runners to take over leadership of the Labour Party, has announced that he would introduce a right to buy-style scheme for private tenants if he ever becomes Prime Minister.
Under current legislation, tenants in properties owned by local authorities can buy these properties but no one has ever previously suggested that the same should apply for privately rented homes.
However, Corbyn – who is MP for Islington North – believes that this is just one way we can begin tackling the UK’s housing crisis.
The MP for Islington North says the right to buy scheme he wants to introduce would offer private tenants discounts similar to those available to local authority tenants.
Corbyn wants to offer private tenants subsidised mortgages that would be funded by withdrawing £14bn of tax allowances currently enjoyed by buy-to-let landlords.
Meanwhile Andy Burnham, who is also among the front runners to take over the leadership of the Labour Party, is proposing that local authorities should have the power to seize homes under compulsory purchase orders.
The plan would give councils the ability to buy up a home should the property or landlord be deemed unfit.
Burnham, who has been the MP for Leigh in Lancashire since 2001, also plans to allow councils to borrow money to build more homes by removing the borrowing limits placed on local authorities by successive governments.
If the proposals put forward by both Corbyn and Burnham send a shiver down your spine, the good news is they are highly unlikely to be implemented unless either politician wins both the Labour Party leadership battle and the next general election (which isn’t due to be held until 7 May 2020).
However, the raft of legislation being introduced by the current government places an unfair burden on landlords. Here at Assetgrove, we can help landlords by taking over the responsibility for your property portfolio while providing you with a fixed guaranteed rental income for up to five years.
To learn more about our Guaranteed Rent Scheme, get in touch with Assetgrove today.
Image source: www.geograph.org.uk