Introducing a hardship test for landlords will “force many good landlords to flee the rental sector”, some brokers have warned.
There have been reports of Labour planning to introduce “hardship tests” which will make it more difficult for landlords to evict tenants facing financial difficulties.
Release Freedom director, Simon Bridgland, warned that this could lead to an exodus of landlords, leaving the tenant in a “position of despair with no future home or higher rents”.
Instead, Bridgland advocated for reform to stop “spiraling rents” but specified that such reform needs to be mutually beneficial if “the housing crisis is not to turn into a nightmare”.
“Leaving landlords to pick up the tab to subsidise housing costs is not the answer, but it seems to be exactly that for Labour,” he added.
A similar sentiment was shared by Lawson Financial director, Michelle Lawson, who said the only logic behind this idea, at a time where the UK is experiencing an escalating housing crisis, is that “they want landlords to sell”.
“Just last week, the National Residential Landlords Association found that the private rental sector alone contributed £45bn to the economy and 390,000 jobs,” she said.
“This type of action will be hugely damaging to an already desperate sector that helps some of the most vulnerable in society.”
Additionally, Orchard Financial Advisers managing director, Ben Perks, warned that this may be one way to “put a plaster” on the current housing crisis by making being a landlord "so unattractive that they all sell up”.
He explained that, while the policy may result in more homes becoming available, it will also leave tenants “fighting for accommodation” which will drive up rents.
“If the government wants to help their tenants who face financial difficulty, they should put financial difficulty, they should put financial aid in place.
“Landlords should not have to take the hit.”
Meanwhile, R3 Mortgages director, Riz Malik, advised Labour to “tread carefully” given that private landlords fill a “vital gap” in the private rental sector.
He added that, with talks of the possibility of capital gains tax being aligned to income tax thresholds, the benefits of being a landlord are “diminishing by the day”.
Lastly, Yellow Brick Mortgages managing director, Stephen Perkins, described private landlords as “key” to the solution of the housing crisis.
He explained that, as many people can only afford or choose to rent by pushing landlords out of the market, rental demand is currently outstripping supply.
“Rents are therefore becoming unaffordable as many landlords see the hassle far outweigh the economic gains continuing.”
tom.dunstan@ft.com
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