- Readers Rating
- No Rating Yet!
- Your Rating
The Labour party is considering new buy to let property restrictions if they come into power at the next election.
The restrictions could include capping rent rises at inflation with the abolition of tax breaks for those thought to be charging ‘excessively’.
Further restrictions could include tighter controls on the ability of landlords to evict renters ‘on spurious grounds’, and even ending a buy to let property owner’s automatic right to sell.
The report, called Land for the Many, calls for action to end what Labour called the ‘buy to let frenzy’.
It said landlords should no longer be automatically allowed to evict a tenant if they want to sell the property, and that rent rises should be capped at inflation or the rise in earnings. It also called for an end to mortgage interest tax relief for landlords who charge steep rents
The report said the restrictions on private rent were essential to ‘discourage the use of homes for speculation and rent extraction’ and to ‘reduce the amount of unearned windfall gains that are privately captured’.
Shadow Chancellor John McDonnell said at the weekend that he was interested in a proposal to replace inheritance tax with a lifetime gifts levy. Rent controls and an end to no-fault evictions are already party policy.
The Land for the Many report said: ‘We recommend that a Labour government should set an explicit goal to stabilise house prices, so that wages can catch up and the house-price-to-income ratio can gradually fall.
‘Tenancies should be open-ended, and landlords should lose their power to evict a tenant who has not broken the terms of the tenancy agreement for the first three years of the tenancy agreement and should have to provide grounds for eviction after that point.
‘There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower). Buy to let mortgages should be more firmly regulated and restricted.’
The report even suggests that compensation (equivalent to three months’ rent) should be given to tenants who are forced to move through no fault of their own.’ This would apply even in cases where the landlord wanted to sell up.
Labour would look to bring in the numerous new restrictions once in power.