What could a new Prime Minister mean for the private rental sector?
By Cara Wiltshire, Legal Assistant at Woodstock Legal Services
Now that the UK’s Prime Minister, Boris Johnson, has resigned, a new Conservative Party leader is set to be chosen by September 5th. So, what could this mean for the private rental sector?
Rishi Sunak is one of the many MPs in line to be our next Prime Minister. His approach, described as “common sense Thatcherism”, could dent the tax benefits of landlords who own their portfolio through a limited company.
On the other hand, less funding for local councils could limit their ability to intervene in the rental market. This could then lead to a reduction in the new landlord licensing schemes or limits on short-term rentals.
As a result, this could increase the chances of widespread rental reforms, including the banning of Section 21 evictions, passing through parliament without any changes.
As well as Sunak, we have Liz Truss also in the running to become the UK’s next Prime Minister. Truss is promising “the biggest change in economic policy for 30 years,” cutting taxes and simplifying regulations.
She has pledged to reverse the planned rise in corporation tax, which could provide a boost for limited company landlords.
However, her stance on simplifying regulations could lead to a slow-down of the regulation of the rental market. For example, some of the proposals in the Fairer Renting White Paper could be watered down or scrapped altogether. This could be a big change for landlords, so keep your eyes open for a possible change in the roadmap to reform.
Truss has shared little detail on her plans to review the Bank of England’s mandate, therefore it is hard to predict how landlords could be affected. However, a change to how the Bank of England works could see interest rates rise or fall, which could affect landlords’ buy-to-let mortgage repayments.
The main question landlords have now is what will happen to the Renter Reforms Bill when we elect the new Prime Minister. The government recently published the white paper on rental reforms, which pledged to remove Section 21 evictions, introduce a rental ombudsman, and more. The worry now is what changes (if any) the new Prime Minister will make to this bill. It is unlikely that the bill will be completely scrapped, however, depending on who is elected, could we see measures watered down to favour landlords or will reform progress as expected?
If you are a landlord or agent reading this, it’s essential that you keep up to date with the candidates’ policies and what they could mean for you. Time would also be well spent examining your portfolio to make sure all is in order. Look at the tenancy documents, referencing information, communications on the file, schedule of rental payments, the condition of the property, and issues of disrepair. This will put you in the best possible position to navigate any changes coming our way.
