Industry News Sally Walmsley 11/06/2024

General Election 2024: Conservative plans do nothing to address shortage of homes to rent

Plans to temporarily scrap Capital Gains Tax for landlords selling homes to their tenants have been announced by the Conservative Party during its election manifesto launch today.

The tax would be axed for a two-year period, to encourage landlords to sell properties to existing tenants – yet the NRLA said this does not address the chronic shortage of homes to rent.

The proposal forms part of the party’s 2024 general election manifesto, which also reiterates its commitment to rental reform – including the abolition of section 21 repossessions.

Capital Gains Tax is paid on the profit made when an asset – in this case a property – is sold.

The NRLA said that while there is nothing wrong with the proposal in and of itself, more is needed to tackle the mismatch between the supply of, and demand for, rental housing, with figures from property portal Zoopla, showing there is now an average of 15 tenants competing for each property advertised to let.

NRLA Chief Executive Ben Beadle said: “Tenants who want to become homeowners should be supported to do so.

“Whilst incentivising landlords to sell to existing tenants has the potential to help, it will not reverse the damage to the rental market caused by tax hikes under recent Conservative governments. 

“As the Institute for Fiscal Studies has warned, changes to mortgage interest relief and the level of stamp duty paid by landlords have led to higher rents and stifled the supply of homes across the private rental market.

“This comes at a time when the number of tenants enquiring about every available rental property has more than doubled compared to pre-pandemic levels.”

Rental reform

In terms of its rental reform proposals, the NRLA stressed the need for landlords to have confidence in any new system.

Ben said: “Reform of the rental market should have taken place in the last Parliament.

“As we said then, a balance between security for tenants and policies which retain the confidence of responsible landlords is crucial if we are to deliver much-needed homes for rent.

“That balance can only be achieved by fixing a broken justice system so that tenants and landlords can enforce their rights when section 21 ends in a timely and effective way. 

“As the Law Society has warned, reform risks being ‘in vain’ without investment in legal aid support and the courts.”

Other manifesto promises

In terms of housing, the manifesto also included commitments to:

  • Complete the process of leasehold reform, including capping ground rents at £250, reducing them to peppercorn over time.
  • Support local and smaller builders
  • Renew the Affordable Homes Programme to deliver homes of all tenures.
  • Continue support for leaseholders affected by historic building safety problems through developer funded remediation programmes
  • Tackle rough sleeping and review the quality of temporary accommodation.
  • Manage the ‘uncontrolled’ growth of holiday lets
  • Ensure Right to Buy discounts rise with inflation

Other housing related pledges included promises to:

  • Accelerate the roll-out of Universal Credit
  • Continue to digitise court processes and expand the use of remote hearings
  • Offer energy efficiency vouchers to households to support the installation of energy efficiency measures.

More information

  • The Conservative manifesto can be read in full here.
  • Please follow our social media channels and keep an eye on the NRLA news site for all the latest on the General Election and rental reform going forwards – as well as checking out the latest on the party manifestos on the NRLA’s dedicated General Election Hub
Sally Walmsley

Sally Walmsley Magazine and Digital Editor

Sally is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.

See all articles by Sally Walmsley