Tax Office

Category: government and politics

Several of the UK’s leading political parties have been holding their annual conferences. The topic of how each of them would approach the private rental sector (PRS) is high on the priority list. 

Although another General Election (GE) could be up to four years away, all parties are keen to lay out their future campaign promises and distinguish their objectives from those of Labour. 

There has been some ambiguity about where each of them stand on certain policies that would impact private landlords. In this article, we clarify where they currently stand on the relevant issues.

Conservative Party

Stamp duty flip-flop

Speaking at the Conservative Party Conference in Manchester, Kemi Badenoch vowed to abolish stamp duty if the Tories are voted in at the next GE – to the approval of many landlords and property investors.

On top of this, Badenoch pledged to scrap the carbon tax, reverse the changes to inheritance tax for famers (a.k.a. the ‘tractor tax’), and remove VAT on private school fees. 

Badenoch was highly critical of stamp duty in particular, calling it a “bad tax” and that scrapping it would allow more British people to achieve their dreams of home ownership.

However, soon afterwards, the Tories issued a press release which clarified their position. Although they are against stamp duty on primary homes, this policy would not extend to additional properties, as well as properties bought by companies or non-UK residents.

Nonetheless, Badenoch made no indication that the Tories plan to increase any of the mentioned taxes, so whilst this is not quite the news landlords hoped for, it does not look at this moment that this cost would go up under their leadership. 

Culling several taxes could deplete the HMRC’s income, but Badenoch claimed that they can recoup this by cutting the welfare budget, foreign aid, and the Civil Service, which would free up £47 billion in planned savings.

Renters’ Rights Bill criticism

In both the House of Commons and House of Lords, the Tories have opposed various aspects of the Renters’ Rights Bill. 

Earlier in the debating process, Badenoch asserted that the Tories’ ill-fated attempt to introduce similar legislation during their long tenure – the Renters (Reform) Bill – was fundamentally flawed and warned Labour not to repeat the same mistakes. 

Meanwhile, Baroness Scott of Bybrook has been determined to delay the Renters’ Rights Bill in the House of Lords. More recently, she and other Tory peers planned to reintroduce key amendments that Labour had previously rejected.

Despite this pushback, the Conservatives’ last manifesto before the 2024 GE was aligned with Labour’s goal of removing Section 21, the ‘no-fault eviction’ rule. This policy does not appear to have changed.

Reform UK

Tax reforms

Reform have been highly critical of Labour’s tax plans. 

Although they have not pledged to abolish stamp duty entirely, Reform have proposed to increase stamp duty thresholds to £750,000. They also vow to reduce capital gains tax. These suggested tax reforms could reduce transaction costs for landlords.

Section 24 (Mortgage Interest Tax Relief)

Reform have proposed to revoke Section 24, which would present a major financial relief for many PRS landlords.

Section 24 is controversial because it restricts landlords’ ability to deduct full mortgage interest costs from their rental income, therefore reducing profitability. Landlords with multiple mortgages are especially impacted by it and swathes of landlords have incorporated since its introduction.

Section 21

Similarly, Reform have been opposed to Labour’s upcoming abolition of Section 21, arguing that this policy could reduce flexibility for landlords and discourage investment in the PRS.

However, so far, Reform have made no concrete plans to reverse the Section 21 ban if they get into power.

Green Party

Abolition of landlords

Just as Reform position themselves as a more right-wing alternative to the Conservatives, the Green Party have more radical left-leaning policies than Labour.

Delegates at the latest Green Party Conference voted on a policy to abolish private landlordism entirely, in favour of reinforcing social housing.

Following this openly hostile pledge, the Greens promised to:

  • Introduce rent controls (which Labour have rejected).
  • Remove all financing options for landlords, including buy to let mortgages. 
  • Give local councils ‘first dibs’ on buying any property that is up for sale, or falls below minimum standards.
  • Enforce that all rental properties meet a minimum ‘C’ grade on their Energy Performance Certificates (EPC).
  • Introduce a Land Value Tax on rental properties, including short-term lets and holiday lets.

Labour MP Callum Anderson harshly criticised these policies, which would effectively dismantle the PRS as we know it:

Abolishing landlords won’t build a single new home. Not clear what this motion means and I suspect most Greens don’t either. The Labour Government is focused on what really matters: getting more people into safe, affordable and environmentally friendly homes to rent or own.

Liberal Democrats

Moderate stance

Liberal Democrat councillor Karen Holmes also clapped back at the Greens, stating that the policy of abolishing landlords is not credible. She cited the enormous logistical costs of councils buying out five million PRS properties, estimating that the collective UK taxpayer would be £1 trillion out of pocket.

Holmes reiterated that the Lib Dems are not interested in radically overhauling the PRS and that they acknowledge the thousands of responsible landlords providing much-needed homes. Their moderate stance on this issue offers a middle-ground between their Labour and Conservative rivals. 

It is less clear where the Lib Dems as a whole stand on some of the key issues discussed in this article, such as Section 21 and stamp duty.