A leading landlord has warned that Labour’s radical plans for the private rental sector are deeply worrying and could easily lead to a wholesale exit from the sector.

James Tanner (main image), who is a portfolio landlord in London and has a wide range of contacts among other landlords via his work as an energy efficiency consultant, says many are extremely apprehensive about Labour getting into power.

The party has publicly made its intentions clear should a victory at the next General Election come to pass, as is widely expected.

Section 21

The party wants to go much further than the Tories. Although Labour leader Keir Starmer wants to ban Section 21 evictions (as all the main parties do), he also wants to tighten up Section 8 evictions to close ‘loopholes’ that disreputable landlords might use to exploit tenants and jeopardise their security of tenure.

Deputy Leader Angela Rayner, who is facing questions over the sale of her former council home before she became an MP, has in the past made it clear she believes the landlords-tenant relationship is unbalanced, while shadow chancellor Rachel Reeves recently said a “house should be a home not an asset”.

The Tories have adopted most of Labour’s previous manifesto promises in the Renters (Reform) Bill currently progressing through parliament,

This includes getting rid of Section 21 but also introducing a four-month notice period for landlords, a national register of landlords, and a “suite of new rights for tenants”.

This suite includes a right to request speedy repairs and the right to have pets. Rent controls, although much heralded within the party, have been rejected in the past by Labour’s leadership.

But the NRLA last week warned that some of the party’s other policies for the sector separate it from the Tories.

Eviction changes

For example, it wants to stop landlords from selling a property for two years after a tenant moves in and requiring landlords to offer a property for sale to the incumbent tenants before putting it on the open market.

But what worries Tanner most is that Labour is proposing to remove rent arrears entirely as a ground for possession and introduce a ‘test’ for all other grounds to ensure an eviction did not cause a sitting tenant to endure any hardship.

“I don’t think the Labour party realises how damaging this would be – landlords taking on a tenant who then stopped paying the rent soon after they moved in would face two years of no income but still have to pay the mortgage,” he tells LandlordZONE.

“This would clearly be a crazy situation and would put most landlords off investing in the sector.

“It’s non-sensical – if a landlord then defaulted on their mortgage and the lender repossessed the property, the tenant would be evicted anyway, defeating the point of the policy.”

James Wood (pictured), the NRLA’s policy chief, agrees, saying such a radical approach to evictions would “likely have a significant impact on investor confidence, particularly for smaller landlords who are at risk from a tenant going into rent arrears.

“It would also likely deter new entrants to the market and would also increase the need for the courts to intervene and exacerbate the delays landlords already face.

“The NRLA is committed to ensuring that rental reform works for both landlords and tenants, and we are not seeking to retain Section 21. But whatever replaces Section 21 must retain the confidence of landlords.”