Landlords and Property Investors – What to Expect from the Upcoming General Election

As the general election approaches, the private rental sector (PRS) faces a mix of nervous uncertainty and opportunity for change. Two leading experts, Jeni Browne from MFB and Peter Littlewood from iHowz Landlord Association, share their insights on what the election could mean for landlords in terms of legislation and mortgage interest rates.

Legislative Needs of the PRS

Peter Littlewood, Co-Founder of iHowz Landlord Association, has long advocated for fairer legislation within the PRS. Drawing on decades of experience, he outlines the critical areas he hopes will be addressed in the party manifestos:

1. Continuity and Stability:
   • The role of Housing Minister should be stable, ideally remaining unchanged for the duration of the Parliament. Since 2010, there have been 16 Housing Ministers, a turnover rate that undermines the position’s importance.
2. Housing Knowledge:
   • While expertise in housing is beneficial for a new minister, continuity in the role is more critical.
3. Pragmatic Legislative Changes:
   • Avoid unnecessary changes driven by personal ambition or political rhetoric. Currently, landlords navigate over 170 pieces of legislation, and many Local Authorities lack the resources to enforce them adequately.
4. Balance of Power:
   • Historically, the balance of power in the PRS has swung dramatically. The 1985/88 Housing Acts struck a balance that has allowed the PRS to thrive. Current laws already provide significant tenant protections.
5. Legislation Principles:
   • PRS housing is the tenants’ home.
   • PRS is a business for landlords, crucial for their livelihood.
   • Legislation must be fair, proportionate, and explicit.

Peter Littlewood emphasizes that successive Governments have exacerbated housing issues by not building enough houses, particularly affordable/social/council housing, and then criticizing private landlords for filling the gap at their own expense and risk.

iHowz’s Proposal:

• A comprehensive review of the PRS rather than superficial tweaks.
• iHowz has published a manifesto, “The New Tenant-Landlord Partnership,” calling for clear-cut amendments to create a fairer, more efficient PRS. The manifesto is available at iHowz Manifesto.

Mortgage Interest Rates and Market Stability

Jeni Browne from MFB discusses how the election cycle could impact mortgage interest rates:

1. Current Market Conditions:
   • Since January, SWAP rates (which influence mortgage interest pricing for many lenders) have fluctuated. Knowledge of the upcoming general election, US inflation, and geopolitical events have contributed to market instability.
2. Election Impact on SWAP Rates:
   • The announcement of the general election has already caused a slight rise in SWAP rates. The money markets are eagerly awaiting each Party’s manifestos to assess potential inflationary impacts.
3. Bank of England Base Rate (BBR):
   • While a decrease in the BBR was expected in June, it’s likely to remain unchanged throughout the election period. Experts predict the first 0.25% drop this summer, with August being more realistic than June, and mid-September another plausible option.

Preparing for the Future

Advice for Landlords and Investors:

• Review Your Portfolio: Assess your property portfolio and discuss your plans with financial advisors to ensure informed decisions.
• Consider Property Investments: With UK house prices showing signs of recovery (0.4% month-on-month rise in May, with an annual growth rate up to 1.3% from 0.6% in April), now might be the time to take advantage of cheaper housing stock.

For further information and personalized advice, please contact Jeni Browne at MFB or Peter Littlewood at iHowz Landlord Association.