General Election 2024 | MIH London Property Management

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As the general election looms, what does this mean for the property rental market?

An election on the immediate horizon always creates some consternation and predictions of unwelcome change and upheaval. But historically, whilst the prospect of change can give cause for concern and lead to a temporary slowdown in activity, statistics show that it doesn’t affect the market for too long.

IT’S ALL IN THE ANTICIPATION

It seems that pre-election jitters are all in the mind. For a short time in the run up, as the party leaders do exhaustive battle on TV and in the press, we clutch the edges of our seats as we fear tax increases, policy changes and the knock-on effect on things like the economy and interest rates, yet previous analysis suggest a much more positive outcome.

“…in 2019, buyer demand remained stable in the months preceding the election, with a 1% year-on-year increase in October and a 4% increase in November. Demand continued to rise by 13% in December, the election month, followed by a 14% increase in January 2020.”

WHAT’S IN STORE

There are a few key stand-out points on the agenda currently that are top of the property market agenda, that being affordability, the Renters Reform Bill and the Leasehold Reform Bill.

Affordability
The greatest recent impact on the property market both for sales and rentals has been the rise in interest rates. This has affected potential buyers by reducing their buying ability due to increases in mortgage costs, therefore pushing people into the rental market space. At the same time, mortgage rises and tax changes have also scuppered the profitability and feasibility of more than a few landlord portfolios. So the rental stock has started to dwindle, creating a double bind, putting pressure on the rental market at both ends – especially in busy cities such as London.

Whichever party takes power, it is hoped that there will be particular attention to the development of affordable homes and a drive towards a reduction in interest rates. Both are needed to reboot the housing market for future generations and would be beneficial to those seeking to own their own homes and those with a buy-to-let portfolio.

Renters Reform Bill
Not surprisingly some of the plans including the scrapping of Section 21 evictions won’t be passed this side of the election. Described as the biggest change to tenancy law in a generation, it is currently awaiting the committee stage having passed a second reading in the House of Lords. The Conservatives have already pledged their commitment to this bill. As for Labour:

Speaking in May, Shadow Housing Minister Angela Rayner said that the Labour Party would “ban no fault evictions, no ifs, no buts” if they win the election.

… with the suggestion that Labour would aim to ban Section 21 evictions within 100 days of forming a government. So it seems both leading parties are firmly behind the Bill and ready to push on.

Leasehold Reform Bill
The pending Leasehold and Freehold Reform Bill completed its final stages in the Lords on Friday 24 May and received Royal Assent. The remaining stages were fast-tracked to ensure that the bill was pushed through before the dissolution of Parliament.

The Bill has therefore already been enacted, but whilst some much anticipated changes made it through, others fell short of hopes and expectations. In particular, the capping of ground rents and the abolition of freeholds on new flats were passed over. It remains to be seen what further reforms might be achieved going forward post-election.

ROLE OF TPI

You can also rest assured that The Property Institute will be working on behalf of the residential property management sector to continue to support and promote safe and ethical management of tall and complex buildings. It aims to continue to collaborate with the government, whichever party is the victor, to drive reform and press changes in legislation, as revealed in their most recent news update.

PREDICTED OUTCOME

By all accounts, both main parties have a similar agenda in this area and therefore neither should create a particular disadvantage if they take power. The point here being that despite the worries, it often all works out for the best – and better than expected.