The Conservatives have pledged to bring in the ban on letting agent fees charged to tenants.
It means that all three of the main political parties at Westminster would introduce the ban.
While the Tory manifesto is detail-free on how “a Conservative Government will reform and modernise the home-buying process so it is more efficient and less costly”, yesterday Michael Gove explicitly mentioned Home Information Packs in a radio interview – see our other story today.
This idea to ‘reform’ the process was trailed in December 2015 with a Treasury paper titled A Better Deal: Boosting competition to bring down bills for families and firms. The document looked at big bills for consumers such as energy and broadband as well as buying a home.
A section headed “Injecting innovation into the process of home buying” said the Government wanted to inject innovation into the process of home buying, ensuring it is modernised and provides consumers with different – and potentially quicker, simpler and cheaper – ways to buy and sell a home.
It said: “Encouraging new business models (for example, online only estate agents) is key to enhancing price competition in the real sector, but these have yet to penetrate the market.”
Then Chancellor and now Evening Standard editor George Osborne promised a call for evidence in March 2016 that has never emerged.
Other pledges in the Tory manifesto include cracking down on escalating ground rents and encouraging landlords to offer longer tenancies as standard.
Ian Westerling, managing director of Humberts, welcomed the proposals.
He said: “We would be delighted to see any measures that could speed up the conveyancing process which, despite the advancements in online services, is laborious and anti-consumer friendly.
“In terms of costs, clearly, the current stamp duty levels are having a major impact on the transactional volumes in house sales in the £1m+ sector and, making this more affordable, will increase the volume of properties that will be bought and sold in the UK.”
However, the Residential Landlords Association (RLA) was not too impressed.
Alan Ward, chairman of the RLA, said: “With almost 2m new homes to rent needed by 2025, this manifesto does not go far enough in supporting good landlords to develop the new homes we need.
“We need a tax system that encourages landlords wanting to invest in new homes for tenants and a planning system that frees up small plots as well as improving existing stock.
“Should they win on June 8 we will work with Conservative ministers to ensure they harness the opportunities the private rental market presents to meet today’s manifesto commitment to 1.5m new homes by 2022.”
All three parties have now released manifestos this week, with Labour’s covered on Tuesday and the Liberal Democrats‘ on Wednesday, with each promising 1.5m new homes by the end of the next Parliament.
Commenting on the manifestos, a statement from Mark Hayward, chief executive of NAEA Propertymark and David Cox, chief executive of ARLA Propertymark, said: “The housing market is in crisis.
“We are simply not building enough homes to meet the demand from both the private rented and sales sectors. We are concerned that housing has become a political football for future governments to score points against each other and this is getting in the way of actually ensuring we have the right sort of houses available, in the right areas, across all tenures, to provide the homes that people need.
“Only 32,000 affordable homes were built in 2016, which hasn’t made a dent. Although the parties are pledging to build hundreds of thousands of new homes, we need to seriously consider if such pledges are even remotely practically possible.
“As we have said many times, we need to take the politics out of housing and consider other ways to ease the pressure on house building that will allow us to provide a more accessible and affordable housing market for all.”
Isobel Thomson, chief executive of the National Approved Letting Scheme, backed protections for tenants but said the body had yet to see genuine evidence of demand for longer tenancies that all three parties are advocating.
She also expressed concern regarding the lettings fee ban: “Labour, the Liberal Democrats and the Conservatives all specifically pledge to ban letting agent fees. While this not a surprise, we have warned that the fee ban will lead to a number of unintended negative consequences for the consumer – driving fees underground, a reduction in service to tenants and the lowering of standards in the sector.
“We believe that manifesto promises on banning fees are a missed opportunity to really get to the root causes of problems in the private rental sector (PRS).
“If the political parties truly want to tackle the issue of excessive fees, they must look to the bigger picture, stop the current piecemeal attempts at improving the PRS and regulate all letting and management agents.
“While the Conservatives promise to improve protections for those who rent, they also pledge to go further with market reform, and to strengthen the hand of regulators and enforcement. We hope this means wholesale regulation of the PRS.
“It’s clear that all parties want to improve the sector, but none has provided detail on how the sector will be effectively policed. Only by driving out rogues and criminals with proper regulation and enforcement that has teeth, will consumers be able to have confidence and security when they rent a home. We urge whichever party that takes the reins on 9 June to make this a priority.”