In this ‘election special’ episode of The Property Cast, we look beyond the initial flurry of activity to the longer-term impact of the new Labour government on landlords, with special guest, Sean Hooker, Head of Redress at the Property Redress Scheme.Sean takes an active interest in politics in both his professional and personal life, meeting regularly with government and other stakeholders in the private rented sector to help shape policy and raise standards. Eddie, Paul and Sean explore the most pressing issues in Keir Starmer’s in-tray and debate the key decisions the new government will need to make. From the timescale required to scrap Section 21, to regulation, rent controls, raising standards, tax incentives and much more. Tune in to find out whether landlords should be worried now that we have a Labour government.
For more insights from industry experts, our article ‘What does the General Election mean for landlords?’ shares predictions and highlights from London’s Landlord Investment Show, which was held on the eve of the General Election.
Eddie Hooker:
And welcome to the latest episode of The Property Cast powered by Total Property. And in this episode, we're going to talk a little bit about “should landlords be worried about the new Labour government?” And of course, we're recording this on the Monday after the general election when it has been confirmed that the Labour Party won a landslide victory. So, this is all hot off the press and of course, I'm joined by Paul Shamplina, founder of Landlord Action and Chief Commercial Officer of HFIS. Paul, welcome.
Paul Shamplina:
Welcome, thank you.
Eddie Hooker:
Good, and of course, Sean Hooker as our special guest. Now Sean is the Head of Redress for the Property Redress Scheme, which is one of the two government redress schemes that property agents in England must join. Sean has worked for the HFIS group for 17 years. Originally helping set up the resolution service for the mydeposits Tenancy Deposit Protection Scheme and then moving to set up the Property Redress Scheme. Sean runs a team of professional dispute resolution experts and is a trained mediator and adjudicator and also takes an active interest in politics and meets regularly with the government. So Sean, welcome again.
Sean Hooker:
Yes, thank you Ed, yeah, that's a lovely resume. Yes, 17 years.
Eddie Hooker:
17 years, that's a long time.
Sean Hooker:
Actually, when I joined, that was the last time there was a Labour government.
Eddie Hooker:
Absolutely.
Sean Hooker:
Absolutely. Been through the whole of it, the last 14 years and seen every element of all the, was it 15 odd?
Eddie Hooker:
15 odd housing ministers.
Sean Hooker:
15 ministers.
Eddie Hooker:
Well, look, we're going to talk about a lot of those things now. So why don't we just dive in and I'll open with the first question and then.. Can you talk us through the timeline, Sean, of what the new government will need to do in the first few weeks? I think the King's speech is slated for the 17 of July. So what happens between the general election and now what happens between over the next, well he's talking 100 days Keir Starmer isn't he?
Sean Hooker:
Yeah 100 days.
Eddie Hooker:
What happens now?
Sean Hooker:
Ok so look we had the general election, the announcement was on the Friday and immediately and unusually Keir Starmer met with his cabinet on the Saturday to introduce them all to the public. Pretty much very similar names to the ones that were the spokespeople before the general election so there was no real surprises.
So, in terms of housing, we've got on the Department of Levelling Up, whether it retains that name or not we'll see, but that's Angela Rayner and also they announced the junior ministers which was actually the Deputy Prime Minister. She's a Deputy Prime Minister as well so that's pretty much in condition of what we've had in the past because if you remember you know the Levelling Up Department and that sort of thing all evolved from the office of the Deputy Prime Minister so pretty much that area is seen as a very key area to the to the Labour administration.
And of course, we got Matthew Pennycook, who is now the spokesperson, he was the spokesperson is now the minister who's going to deliver on the Private Rented Sector. So look, day one, they will meet they will have, you know, there would have been a big statement. We're starting work, we're rolling up our sleeves from day one. And of course, Parliament opens again tomorrow, we're on the Monday. So I told you here that they would have opened on the Tuesday. And basically what happens then is they elect a speaker and then all the MPs are formally sworn in. So not a lot goes on in that particular week until we get to the King's speech, which is when the programme for government will be announced. So the things that Labour want to prioritise will be in that case.
Eddie Hooker:
But they would have, of course, they'd have done. So as a commentator I've been listening to a lot of the hard work, a lot of the planning has already been done because Labour obviously had a big assumption that they would be the next government.
Sean Hooker:
Yes, so what would have happened whilst Parliament was prorogued, I mean the civil servants would have still been turning up to work. They wouldn't be able to undertake a lot of work on a legislative programme, they didn’t know what was going to be in place but they would have been doing some assumptions and preparations, what happens if X, what happens if Y. So hopefully they are geared up for when Minister Rayner and Matthew Pennycook go into the office today actually, on Monday, they will start to say ‘well actually what do you want to do?’ ‘are you going to take the bills that we've already got on the table? what do you want us to do with that? What direction of travel do you want?
Eddie Hooker:
So in short not a lot is going to particularly happen in your view over the next month or so? Well look, the day after the King's speech is when the Government put together their business right, so we'll know at least on a week by week basis what the government intends to do in any particular week.
And they could actually announce quite a lot of work in advance. Maybe, we've got to remember that traditionally MPs go into summer recess.
Eddie Hooker:
Yes, it's going to be a very short recess.
Sean Hooker:
Yes, so it's going to be a shortened one. So Keir Starmer, I was talking about... cutting that down to the minimum holiday. So if you're an MP, a new MP, I wouldn't be booking a long trip to wherever you're going.
Eddie Hooker:
And Sean, what are the key decisions that they will now need to make?
Sean Hooker:
So this week they're going to be talking about planning and putting some ideas, obviously this massive house building programme, which to be fair, Paul, every government promises and has always promised, even going right the way back to the 90s. And when Labour were in last and successive governments have absolutely failed haven't they?
Paul Shamplina:
I mean I think we've got the Renters Reform Bill, I think before that is the planning. The planning is a priority because of course the house building.
Eddie Hooker:
We haven't seen any detail, we have to wait for the detail. 150,000?
Paul Shamplina:
Yeah, well they said 1.5 million in five years but we hear the same old story all the time. I mean obviously we have, I think the emphasis is about affordability, is about the social housing, is about housing associations, is about building, is about planning, they've not got enough planning officers, it needs a total, total reform. I mean, I think the last two governments have talked about planning reforms, it's never actually happened. So I know that that is going to be high on the agenda. What do you think?
Sean Hooker:
I totally agree. What you have to remember is planning, planning is a legal framework.
Paul Shamplina:
Correct.
Sean Hooker:
It's not something that you can just on a whim change. It is a massive job to change the law regarding to planning. Because each of the local authorities that actually enforce it are acting in a quasi legal, no quasi judicial role. So they are acting and looking at all the evidence on each one of the planning applications that come before them against a criteria, and they have to apply that, as a judge would apply the law in a court.
Paul Shamplina:
And I think that the biggest frustrations I hear when I speak to developers when I'm out on the ground is depending on where that development is.
You're stuck with whatever that council, that local authority is. And again, it all comes down to resourcing local authority, civil servants, all that type of stuff. I mean, how are they going to change it?
Sean Hooker:
Well, that's the point. But there was a lot of work that was actually done prior to, you know, to the end of the Conservative government. Gove’s department did actually do quite a lot of work on putting through the principles for a framework for future housing developments, including things like aesthetics and suitability and resources and pretty much kind of like saying actually every one of the local authorities that need to do a local plan have to abide by these principles.
Paul Shamplina:
And on that point they made it very clear they want to build new towns and that is a built high-tech thing.
Eddie Hooker:
Yeah but okay let's just push this a little bit further. I know Sean you're not sitting in the cabinet. Why is planning so important? And what is the impact planning is going to have on the private rented sector because of course when governments talk about building houses generally, they're talking about building houses for owner occupiers or getting more of the younger generation onto the housing ladder. Is that going to is if they sort this planning out and they build these 300,000 houses every year is that not going to have a negative impact on the private rented sector? Just talk me through.
Sean Hooker:
Well, it's both an opportunity and a threat as usual, so in certain areas by having a progressive plan for increasing the number of dwellings within a town, you’ve got opportunity, because you know that you evidently are going to try and build the houses where you’ve got the highest demand so by freeing up some of the planning laws you will actually make it easier to get properties through. Now one of the problems you've got with the private rented sector is it's strength and its weakness. It's a collective of individuals. It's not, you know, it's not corporate money, so to speak.
Yeah, there are corporate, of course there are corporates entering into the private rented sector, but mostly it's the small landlord making individual decisions for what they want to do with the investment properties that they've got. I mean, what you have to remember is that governments build very few houses themselves. You know, we haven't had an era of when the Government has dipped into the public purse to mass build properties for generations now. Now some councils have some capital investment programs and are building them, you know their own houses but mostly who are relying on the private sector the developers to actually build and do the heavy lifting.
Paul Shamplina:
And they can earn more money of course in the private sector. I mean like last year I think there was like 39,000 affordable properties that were built, it wasn't just with regard to you know, with regard to shared ownership, but it was also with regard to renting.
Yeah, it's still not enough.
Eddie Hooker:
No, so big challenges. OK, so let's talk about what everyone was talking about prior to the last, what, the last two to three years, the abolishment of Section 21, the no fault evictions, the so-called retaliatory eviction.
Now Labour have come out and said that they're going to immediately ban or abolish Section 21. Now that was in the original Renters Reform Bill which I understand was a cross-party bill, so there was a lot of support from all parties in the House of Commons and of course that was then rode back slightly as they then started to talk about what they need to sort out the court process and the courts before they introduced that. Now Labour have come out and used the word immediately. What is that actually? Can they ban / abolish Section 21 whether it's a good or bad thing that's not for us to debate but can they actually abolish it within the first 100 days of Keir Starmer's reign?
Sean Hooker:
Well they could definitely abolish it within the first 100 days in terms of getting the legislation across the board to do that. The renters reform. Well it doesn't have to be even the renters reform bill. We suspect it will be part of a renters reform bill but you don't necessarily need to… You could actually put a separate bill specifically banning section 21. I don't think they're going to do that because I think, I do believe that they bought into the idea that this is a package not just a single action. But there will still be the process of going through with Parliament. And they could get that through relatively quickly because they've got a big majority until they get to the House of Lords where they don't necessarily have a majority there. They'll need the support of crossbenchers, Liberal Democrats, Greens, whoever is in that parliament that in that part of the parliament that could help them get it over the line. So they could get the legislation done relatively quickly, maybe even as soon as the autumn. But then you're going to have to look at the implementation period. Because you have a lot of tenancies that are still ongoing and just like whenever you amend any of this stuff there has to be a kind of a transition period so maybe even if you say from when the Royal Assent happens, you cannot issue a tenancy agreement that contains a Section 21 clause in it, because there won't be a Section 21. There will still be a lot of tenancies that will be going through the process of running off for quite a while after that.
So yes, it is possible.
Paul Shamplina:
So is it not day one?
Eddie Hooker:
Is this a headline? Because of course, one part of the issue which Paul you were talking a lot about and I know Ben Beadle from the National Residential Landlords Association was talking about was as part of the package of the abolishment of Section 21 we were looking at the strengthening of Section 8, which is the other option landlords have but only under a certain circumstances. So is this a soundbite? Is this a headline, we're going to abolish Section 21, but there's so many other things that need to go around it.
Sean Hooker:
Well, I think it was so high profile, both before and during the election, although I have to say, on housing, generally, the whole election campaign was very underwhelming, wasn't it?
It was very little. Cards were not kind of revealed. There were a few soundbites that came out. I would say because it's, you know, it's become like a, you know, like a mantra, especially for the campaigning organisations from the tenant side, I think that Labour have no option but to deliver on that promise as one of their top priorities.
So the process will start. Now, the reality is that up until the last minute, cold feet that the government got because there were 49 rebels that were making a big protest against parts of the bill, the intention for the government was to get it over the line before the end of the year. Gove had actually extended the Bill's passage to include this you know the autumn period and into the new year to get it over the line. So even if Labour were slightly quicker than that timetable, we are still on that timetable. And we will still have that 18 months, I think, of it running off. What would be different will be that from day one, if you take a tenant in on day one of the legislation, you will not be able to use a section 21 because it won't exist. And you know, if you evict them the next day, try and evict them the next day, you will have to go through a section eight process. But most of the landlords will not just be issuing a tenancy and then immediately want to get rid of the tenants.
So they will, even if you kind of like book a, you know, book a tenant in on the day after the legislation, you're hoping they're going to be there for at least six months, if not a bit longer, before you even have to worry about an eviction.
Paul Shamplina:
So in your opinion, Sean, now you explained it all to us. Do you think, and it's all guesstimate because we've been guessing the last five years reality wise… Do you think from around about now we could be looking at 18 months? A year to 18 months for that transition, that change for a total transit renters reform mark two to come in with the amendments, and we’ll touch on some of those amendments, is that what you’d say?
Sean Hooker:
I would say to get the whole process, you know 18 months from now, that will be totally in the new regime. So I mean bless the lawyers that do this on a daily basis, I think you know when you employ a lawyer to do an eviction they're gonna have to have to look and say, well when exactly was that tenancy signed, what status is it in and that sort of stuff there, so you know
Eddie Hooker:
More information I think. But your view is that it will happen pretty quickly.
Sean Hooker:
Yes and I think that by having that, you’ll partially alleviate that the courts need to be strengthened up. Because if you from day one, it suddenly all went to, you know, the end of the Section 21 and every single tenancy, you could imagine that the whole system would blow up. Well, Paul, you tell me, you deal with it on a daily basis. If they suddenly, that was the only option without a transition.
Eddie Hooker:
Of course. So the other big, big question, and I actually quite liked your comment there, Sean, that the campaign, the election campaign was pretty underwhelming when it came to housing from all the parties to be fair, not just Labour.
But other than section 21 which was a headline, the other concern I suppose and I think in the debates and in all the rhetoric around this, rent control was never actually answered by anyone. So many landlords do fear this, this is something that they do worry about which is rent control.
Now they had that in Scotland, didn't particularly work and I think the last I understood and you can correct me is that there may be a devolution of power down to the local council to make their own decisions.
But whilst there was nothing much in the manifesto about this, what is your gut feel for what the Labour Party will do with rent controls, or will they just leave that alone and look at the quick wins like Section 21 and maybe raising standards and that sort of thing?
Sean Hooker:
I think they will put the rhetoric in to say that they are trying to look at affordability of rentals, but they won't put anything in.
Now if they pass a further devolution, which they promise to do, and actually all the major parties promise more devolution. There's two reasons for that. One, I think decisions made locally are more robust and are more accountable. But two, as a government, the more you can push down to the lower levels, the less blame you're going to get for when it goes wrong. So I don't think they want to have national rent controls. But they may devolve the powers to some of the regional mayors and authorities. Now at the moment housing or the main part of housing is not at that level. So therefore, you know, would it go down to even lower local level?
And then what resources are there for them to actually have in any place, some form of policing it or scale or whatever. Now, interestingly, there was a survey that has been recently done, that shows that landlords are not as afraid of rent controls as we did think, especially when you put to them that it would mean putting into your tenancy agreement, a annual review where the rent can be upped by up to the rate of inflation, as determined by whatever rate that is chosen to measure your inflation rate.
So that actually, instead of it actually becoming a rent control in the sense that...
Paul Shamplina:
It's a rent review.
Sean Hooker:
It’s a rent review. It's something where the landlord actually has to review the rent on an annual basis, decide whether to put it up or not, and if you're putting it up, put it up by the rate of inflation rather than whatever arbitrary figure that they want to make up.
Eddie Hooker:
Because quite naively on this, and this is a very naive statement, but again, I do get asked this quite a lot actually, so I'm going to put it out there, is that there's no mortgage control.
So if you're an owner-occupier and the Bank of England put their or the building society put their mortgage rate up. There's no one turning round and turning around and saying oh that's become unaffordable which of course mortgage rates are very unaffordable for a very large part of the population especially as they come off their old fixed rates. Why does the private rented sector feel that they have to put, well not the private rented, but why does the government feel they have to put in a rent control when you don't have that in the owner occupier?
Sean Hooker:
I think there's two things there before Paul comes in. Number one... The mortgage market is far more competitive at the moment than the...
Paul Shamplina:
And regulated.
Sean Hooker:
And regulated is number two. So number one, it's far more competitive. And what we have at the moment, because of the supply issue, we have a lack of choice for the consumer. And it's not regulated. You know, and the CML would basically ask some very severe questions if suddenly there was a cartel of mortgage lenders sticking up the rate.
They use what they call the swap rates which I vaguely know about you know you've had other experts that's another whole another whole and that's what dictates what the long-term rates will be for mortgages there's nothing like that in the private rented sector. There’s no gauge. The only gauge you have got of what rent should be is if you challenge a rent increase you go to a tribunal and they have to research…
Paul Shamplina:
And Labour want there to be more power so tenants have more powers…
Sean Hooker:
I think there should be more powers for that appeal.
Paul Shamplina:
But then of course you need to have resource in the tribunal.
Eddie Hooker:
See in the commercial market, again trying to get a challenge against a rent review by a commercial landlord goes on months and months.
Paul Shamplina:
Just on the point with regard to what Sean was saying, I think we have a bit more of a cottage industry obviously when it comes to landlords. We've got 2.74 million landlords.
All the individual landlords, as far as the government is concerned, is that they're all making their own rules up. I mean, that's the reality to a certain extent, responsible landlords. When you talk about the point about landlords, and that article was Leaders Romans, I saw that survey, right, where they turned around and said, actually, the thing is it's the words ‘rent caps’ that scares the life out of landlords. You can't charge more than that. And everyone goes back to the 70s. And it's crushed when it came to investment. And then obviously we had the housing act that came in 1988. And then that opened up a whole industry and you have investment with regards to short-term tendencies.
The word rent caps need to be taken out of the equation because that's the scaremongering. It's actually rent reviews. And when you've got that up to, when it comes to inflation or whatever, bearing in mind we've had a massive spike of landlords that have put rents up because they were forced to put rents up because obviously from September 22 because of the rates with Liz Truss.
Previous to that, landlords haven't really been putting rents up. That's historical. Because I speak to landlords on a daily basis. And I asked a question. I asked a question last week at the Landlord Investment Show. I did a talk to 130, 140 landlords, how many of you put your rent up in the last 12 months? There was about 8 hands that went up.
Eddie Hooker:
A concern I have with that type of, is that even a review is where a landlord might say well, Sean you're a lovely tenant and you're paying X pound a month, I'm not going to change that because you've always paid. You put in these clauses into these contracts and of course well I'm sorry Sean I'm going to have to put it up by the minimum of inflation or five per cent, whichever is higher.
Paul Shamplina:
But don’t forget, it’s discretionary though.
Eddie Hooker:
But people don't look at the word discretionary though, do they? Yeah that's where I worry about putting this kind of control in.
Paul Shamplina:
But then you have the relationships there between landlords and tenants. If you've got good tenants been living in your property for years you build a rapport up with them, you see that they treat your property really well and it's a home and whatever, and if you think about it you put it up three, five percent or whatever it may be, and it might be affordable, but a lot of landlords that don't need to put up won't put it up because don't forget there's a big cost when it comes to onboarding and advertising, putting up property.
And then of course, when you do find a tenant, then actually, well actually before that, I'm gonna have to refurb and spend eight grand on my property. Where's that eight grand? You know, there's all those commercial decisions.
Sean Hooker:
And I think that's exactly the message out there that we should be saying. It's actually, people know where they stand.
So you'll say what happened from the anecdotal stuff from talking to friends and what we've seen in the market is that, you know people were being asked for 20 / 25 percent increases in their rents overnight because. You know after Liz Truss, not Trust .. all I have to say is that there was no trust there! After that day suddenly the landlord looked and said I am NOT making any money. You know they've already had section 24 and suddenly the rates go up and suddenly those big mortgages … I'm literally making no money. I have to charge more.
Paul Shamplina:
Or I have to sell.
Sean Hooker:
Or I have to sell. So they were going to their tenants and they were saying, sorry, 25% up on your rent, you know, and it was as much as that. I mean, I've several friends who, you know, it was kids living in central London had that.
Paul Shamplina:
But on that point, and I think it comes back to this, maybe one of your further questions, Ed, when it comes to, and I've been saying this for the last two, three years, especially more so the last 18 months, then there's the affordability issue.
The biggest topic of conversations with young voters from 17 to 35 was housing and affordability, so then you look at this government - what are they going to do about affordability? So you know you take rent, so it has to be done.
Sean Hooker:
Yeah 100%. And I think that's the thing, the affordability, you know in any healthy market you set your price at the price where you can maximise your profit but you are getting the maximum demand.
So if you suddenly put your prices up and nobody can afford it then then you know you literally cutting your nose off to spite your face.
Paul Shamplina:
But the problem is you're still getting on average 25 tenant applicants looking for one property.
Sean Hooker:
So at the moment we have a booming market out there for demand but the supply is short and what market would not take advantage of that?
Eddie Hooker:
I want to move on to things that aren't in, or were missing from, the Labour manifesto. Let's just focus on Labour. Again, ignore the also-rans as they turned out to be.
One of the key things which I thought might end up in a manifesto was, and you mentioned it earlier, lack of regulation. But the regulation of property agents. Now, admittedly, well not admittedly, the facts are 50, 51, 52% of all lettings are managed by managing agents in one form or another. And that lack of regulation you mentioned otherwise has impacts on health and safety standards, the green agenda, all of these things. Why did they not put that in there or was that just something that... is not now going to happen it's kicked down the line.
Sean Hooker:
Very hard to say. I mean again we're crystal balling. Yeah crystal balling. So the Labour Manifesto as it was written, it was written more like a story than a traditional manifesto. So a traditional manifesto is a list normally and you break it down into the sections. But what Labour did was they talked about themes, they talked about the environment, they talked about the economy, they talked about standard of living and they put that in there to a story of what their vision was. And it was very short on detail. And this is now where we're going to now look. We're in crystal ballgazing. We're going to look and say, what are Labour going to do?
Now, by instinct, they traditionally have favoured regulation over a totally free market. And they have tended to want to have government accountable bodies.
The government can actually control through legislation and other stuff there. So I would say that we are looking at a government that is probably more in favour of regulation than the previous one, but not to the extent that it is going to over regulate.
Eddie Hooker:
want to stifle growth, does it?
Sean Hooker:
It doesn't want to stifle growth. Because one of the interesting things now, rightly or wrongly, that I was reading is that every, you know, for the last 30, 40 years, all economic growth, you know, the growth spurts have had property at the centre of it.
I mean, you know, as we were running down manufacturing and other parts of the industry, so we had the you know, property was up there along with the financial services and driving the economy forward. So they definitely will not want to stifle the property market, they'll need to keep that going. But how you could do that in a regulated way, where you are going to get affordability, there are going to be some wins and some loses for the industry, and we're going to have to see how that pans out.
Eddie Hooker:
Do you think it is something that is on their agenda to look at?
Sean Hooker:
I would say so, not least because isn't that something that the industry has been calling for? Why would you not listen to the sector that is most involved with that part of the economy, the ones that actually are the drivers?
They are saying universally that regulation needs to come in because it actually provides the fair playing field and the market is healthier if you have regulation in place.
Paul Shamplina:
Can I ask a question? With your role as Head of Property Redress scheme, we've got over 19,000 members, haven't we? We're the biggest redress scheme out there.
How would that look like for your members? Because obviously it's about education, accreditation up to a level four standard. How does that look like for your members? Maybe the smaller guys?
Sean Hooker:
Okay, for the smaller guys, so let's not beat around the bush, let's call it what it is because Labour's going to call it what it is. You set up a register. Number one, you set up a register. If you set up the register then...
Paul Shamplina:
But haven't you already got that as your members?
Sean Hooker:
No, but because what we don't do, because we're not a regulator... We by law have to accept people in good faith that they're joining a redress scheme to comply with the law. We don't do huge amounts of compliance from day one. There are not too many hoops that you have to jump through to join. Now that's, you know, that allows people to comply by the law without it being exclusive. So it's a free market in that sense. And we do our compliance as and when we find out that anything's gone wrong. If you have a register and you've got a tick you’ve got client money protection, that you've got indemnity insurance, you've done a certain number of qualifications, you've complied with all the legal requirements that you need, then that becomes your badge, that becomes your entry number into all the other compliance products that you need to actually purchase. And that will help for when an agent wants to get these insurances, there will be a lot less bureaucracy in terms of getting client money protection because already that information is and it would be better for the consumer being and the consumer could go on and look and say you know you know Nigel Jones estate agent 35 years in Cheltenham but you know but he's also he now complies with all of the all of the …
Eddie Hooker:
I mean we are talking I mean we're right at the start of this aren't we and you know we're trying to look at what a Labour government might do five years or event ten years down the line, but you know, there was a lot of good foundations being put in, whether they were actually taken forward or not. So there's stuff that the Labour government will obviously pick up and run with. And of course we'll wait until the King's speech to see if there's any more detail.
I think good, a good step if they do this is to include extending our Awaab’s law into the private rented sector. I think that to me I'd be quite disappointed and shocked if they didn't look at standards within the private rental sector.
What do you think?
Sean Hooker:
Again, you know, the original idea was to set up a property portal and that property to meet the minimum standards. It makes no sense that we have a market where you can, you don’t know that what you are purchasing is literally safe. And we are talking safe. Yes. It's not a difference between disappointment because it doesn't have the right, you know, bit of Wi-Fi or it's as close to the station as you thought.
You want to move into a place where you put your head down every night, knowing that you're going to wake up in the morning, you know, without being sick.
Paul Shamplina:
But also, okay, it's giving account, it's making sure there's accountability that moving from, I still think that the social housing sector is far worse than the private rental sector when it comes to housing standards. Just from my feedback and from seeing stuff but when it comes to a complaint it means the landlord will deal with it a certain amount of time.
Sean Hooker:
100% 100% and you know you're entering into business as a landlord you know you know you certainly don't want to go into a business where there's going to be detrimental harm to your customer.
Paul Shamplina:
Correct.
Sean Hooker:
So it makes absolute sense and you know and it must come also with help and support. Anybody that buys property whether for themselves or for an investment, you know, probably when you buy your first house or flat you don't realise all the things you need to do to it, to keep it safe for yourself, let alone if you're renting it out.
Eddie Hooker:
It’s a serious job being a landlord.
Sean Hooker:
And I think what we need to try and do... We need to give help and support to the landlord investors going in.
Paul Shamplina:
But we need to make sure we got enforcement as well.
Sean Hooker:
We need a hundred percent enforcement. And it'd be easier if you have a register or portal where you can actually, the authorities can go and double check you're on that list. Because you know it'll be like you know you only know a black hole is there because you can see the stars the bright stars around it, you can't see a black hole itself but you can see a gap, so by making that an intelligence led situation where you have to register it becomes far more easy to work out.
Eddie Hooker:
What do you think will happen, Sean, last question for me, what do you think will happen with capital gains?
Well then, I mean that in a way I suppose increasing capital gains tax for property owners actually might keep some property owners within the market rather than selling and being hit by Increased tax. What do you think?
Sean Hooker:
Well, this is a big subject. Yeah, it's a big subject and it's a you know, the government's got to raise money somehow and I think what the industry now needs, it’s had a push me, pull me kind of situation at the moment where landlords are being pushed and pulled and don't really know what the right decision for the long term for their investment is. So we have had Section 24 tax issues which forced or drove a lot of landlords into incorporating and now we've got a situation where they are now firms and so therefore they're treated like a firm, treated like a business, they could be liable to higher corporation tax.
I would say however, that from what I could delve into and listen to from what the government is saying, and the advice that they've been getting, is that if they're going to grow the economy, they're not going to penalise small businesses. So sorry out there if you own a massive portfolio that turns over a multi-million pounds worth of money, you may find that the tax regime might be a little bit more disadvantageous.
But for the small mum and pop landlords, it would be madness for them to actually hammer them further. That's all small businesses. Yes, of course.
Paul Shamplina:
Isn't it now the time, bearing in mind, you know... there's always this fear of, you know, what Labour are gonna be like with regard to landlords? Is it now a time of a message where they could actually say we do need landlords, we want landlords to stay in the industry as long as possible, which gives tenants greater security, yes we want you to be more professionalised and on the back of that I've always said that, you know, because of course, you know, if there's insecurity, landlords come out the market then good tenants are asked to leave a property and then of course they're in an auction war, they're trying to find other properties.
Isn't it a way of actually, if you're a landlord and you let your tenants stay in the property as long as possible, I've always said shouldn't there be some sort of tax advantage or sometimes a benefit. A taper.
You let them in for five ten years … I actually have always said that. Yeah. Don't you think that's a good idea?
Sean Hooker:
I think it's a good idea and I think in other European countries. There is a carrot and stick approach. They have got that, yeah. And if you can get the whole holistic situation where you are building the right number of social housing, that you are building the right number of private for sale properties, and the rental market is healthy and you're supplying that. Why, if you comply with all of those rules, if you're encouraging a landlord to fill that gap, would you not give them an incentive to do that.
I'd like to see more of the council schemes brought in, you know, that they are taking and actually providing, again, the private sector to provide some of the social housing needs. I'd like to see some more incentive for small term developments. So it's not all the big corporate developers. You can build smaller projects and get together with cooperatives and build a smaller state for the rental sector.
Those are sort of imaginative ideas, you know, and actually if we can find the right piece of land, why not build a new town? Milton Keynes, you know, was, you know, great. It's now one of the booming cities. Welcome to everyone from Milton Keynes. And everybody associates it with the cows, you know, plastic cows.
Eddie Hooker:
So, coming right the way back to the question, in a nutshell, Paul, Sean.
We've got a Labour government with a whacking great majority, probably likely to be in power for the next generation they're talking about, but I would say at least two terms. Should landlords be worried about this new Labour government?
Sean Hooker:
I don't think so and I think if you look at the track record of the last Labour government that's when we started the property boom and at the moment it's a very very healthy market for landlords regardless of the fact that there were challenges. Paul you will verify for that when you went to that landlord show last week, the National Investment Show. People were battering down the doors to get into your talks and get information about entering into the market.
So there are new landlords entering every single day into this market, it can't be that bad.
Paul Shamplina:
Yeah I think the government need to send out the right messaging to actually encourage landlords that we want to be professional and we value and send into the industry. I actually just think landlords shouldn't panic, just watch and wait. There's a lot of rhetoric out there.
I think this is a long-term business. I just don't want there to be landlord panic, just wait for the details to come through.
Eddie Hooker:
Well guys, thank you both for joining me on this property podcast. As always with these episodes, the final comment is we need to wait and see until we get more and more information and more detail which will be bringing you hot off the press when we find out what actually is planned.
As for running, obviously we run three regulatory schemes for the government. We obviously are spoken to way in advance of the sort of introduction. So as you say, wait and see.
Thank you very much, Sean, for popping in and giving up your valuable time. And of course, Paul, thank you as always. Thank you for listening. And if you're watching on YouTube, thank you for watching. This podcast will put out on Total Landlord Knowledge Centre, and we'll also be putting it up on LandlordZone so that you can keep up with private rented sector development and news. But for now, thanks very much guys, look forward to speaking and hearing from you in the next few weeks.
