The PRS Sector under Labour Government

There seems to be unanimous agreement from media commentators and elsewhere that, while the Conservative Party had a troubled conference riven by blue-on-blue in-fighting and a loss of collective responsibility, Labour had a very good one. This has led many in the industry to wonder how the lettings sector might look under a Labour Government.


The current polls certainly back that up, with some putting Sir Kier Starmer’s party 30 points ahead. His approval ratings are also vastly better than Prime Minister Liz Truss.


So, while the election could still be two years away and it’s far too soon to call anything, the chance of a Labour Government or a hung parliament with Labour as the largest party now looks much more realistic. That is a pretty remarkable turnaround given the scale of their defeat in 2019 when the Tories – led by Boris Johnson – secured an 80-seat majority.


But what are their proposals for the Private Rented Sector (PRS), and what could happen if they come to power? 

A Pro-Tenant Charter

At the party’s conference in Liverpool in late September, Labour seemed to set out its stall to target the tenant vote as it outlined its plans to create a Renters’ Charter in the first 100 days of coming to power.


Lisa Nandy, the MP for Wigan since 2010 and the current Shadow Secretary of State for Levelling Up, Housing and Communities, told delegates at the party’s annual conference what Labour would do if it won the next general election, which is expected to take place in 2024.


Nandy said the party’s Renters’ Charter would give tenants more rights and safer homes and tilt the balance of power back into their favour. She also told the audience that Labour would prioritise tackling the housing crisis.

The potential new housing charter is expected to include an end to automatic evictions for rent arrears and no-fault evictions, as well as the right for renters to have pets, to make reasonable alterations to a property, and introduce a four-month notice period for landlords.


Nandy has also said Labour would create a national register of landlords, the potential for schemes to make tenancy deposits more portable, and a legally binding decent homes standard.


Nandy also said the party would focus ‘unapologetically’ on providing more council housing – a sign that could worry those operating in the buy-to-let sector. She also claimed Labour would be the first government in a generation to restore social housing to the second largest housing tenure – it has lagged behind private rented accommodation in recent years.

While widespread rental reform was getting much closer under a Boris Johnson Government with a thorough White Paper setting out a clear direction of travel, the Liz Truss administration seems to be taking a more relaxed approach to wide-ranging changes, with the proposals on the ice again for the moment. Housing Secretary Simon Clarke is set to outline his plans for rental reform at some point, although an exact date hasn’t yet been given.


The Times recently rumoured that the Truss Government would be rowing back on its plan to abolish Section 21, so-called no-fault evictions. After a fierce backlash, however, Truss announced her commitment to scrapping the notices at PMQs.


With uncertainty about the Conservatives’ plans, Labour might see this as the chance to be the party of rental reform.


The NRLA wasn’t best pleased with the seemingly anti-landlord rhetoric from Labour. Ben Beadle, the body’s chief executive, said he is fed up with politicians demonising landlords. He claimed that ending automatic repossessions for rent arrears would send a dangerous signal that paying rent was somehow an ‘optional extra’.


He added that Labour should be ‘focused instead on preventing rent arrears in the first place by unfreezing housing benefit rates and addressing the supply crisis in the PRS, which is the biggest driver of rents’. 

A focus on home ownership

In his keynote speech on the conference’s final day, Labour leader Sir Kier Starmer focused on homeowning by pledging to ensure that 70% of Britons would own their own home – up from 65% in England at present.


During the speech, Starmer referenced his personal story, outlining how home ownership had been growing for most of his life and how his family’s pebbledash home had meant everything to them. But he claimed home ownership had been stalling and, to put this right, the party would help first-time buyers onto the ladder with a new mortgage guarantee scheme.


He told delegates: “No more buy-to-let landlords or second homeowners getting in first. We will back working people’s aspirations. Help real first-time buyers onto the ladder with a new mortgage guarantee scheme. Reform planning so speculators can’t stop communities from getting shovels in the ground.

“My message is this: if you are grafting every hour to buy your own home, Labour is on your side. Labour is the party of home ownership in Britain today.”


There will be concern among those operating in the lettings sector about what this means for the PRS, which has played an increasingly vital role in recent years in housing the country. But increasing levels of home ownership to those levels will be easier said than done, with house prices still very high, affordability issues, and the current spike in mortgage rates.

The cost-of-living crisis could, too, encourage more people to rent for the time being while the market remains uncertain.


The current Government has also found it challenging to make it easier for tenants to have pets in their homes because of the strength of opposition to this from landlords. At the same time, plans for a national register seem to have been speculated about for quite some years without any progress on this.


In other words, the pledges made by Labour in the Renters’ Charter could be harder to implement in practice than they are on paper. Many of the Tories’ 2019 manifesto pledges regarding housing are still a work in progress, including rental reform.


At the same time, with the likelihood of a Labour Government higher than it has been for some years, it’s wise for those operating in the PRS to be aware of Starmer’s party’s plans if it comes to power.