Politics and Property
Less than a month to the General Elections, and most property owners are looking to the top to tell them what to do. Every party appeals to a different audience; but as a LandLord, who should you look to?
It is predicted that 2/3rds of LandLords will hang up their keys owing to rent controls and a lack of affordable rental accommodation according to the Residential LandLords Association. With the majority of LandLords using mortgages for their rental property, the rental income must exceed the mortgage payments to even be considered as a reasonable investment. Furthermore, reduced supply will make the fierce rental market ever fiercer for tenants.
The leaked intentions to reduce Inheritance Tax Cuts on properties up to £1million, should drive property prices higher, as offspring encourage parents to stay in their homes until their passing, whereupon the grieving offspring will sell the property to the market, reaping the funds for their own property purchasers – be they upsizing, investment properties or first time purchases for grandchildren. This increased liquidity in the market will make it more difficult for LandLords relying on rental income, and will put pressure on them to increase rental prices – thus perpetuating the frustrations of those saving to get onto the property ladder.
Rent to Own is the brain child of the Lib Dems, requiring an increase in property supply and above average rental charges. When moving on from their rent-to-own homes, the owners will have a deposit to put towards a mortgage, ultimately driving property prices higher as there are more buyers in the market.
500,000 socially rented houses – despite her now infamous blunder regarding how this would be funded, this would put pressure on existing LandLords to reduce rents to maintain competitive in the market.
As a LandLord where should your vote lie? There is no obvious answer. Labour will ensure that the market for LandLords is more regulated and that rents are controlled, benefitting tenants, with longer tenancy agreements; thus reducing voids and the cost that ensue. The Tories offer the fewest restrictions for private LandLords, which can encourage rogue LandLords – as could the Green Party who will force LandLords to let properties for less, reducing yields and forcing LandLords to cut costs. The Liberal Democrats intend to build more properties, which may increase competition for LandLords wanting to increase rental yields, however, by facilitating property purchases, this should increase the value of the homes. The Green Party have indicated that they want to put pressure on LandLords to reduce rental prices, which for many LandLords may be impossible.
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