How will the general election impact renters and buy-to-let landlords?

Private renters and landlords make up a significant portion of the UK electorate. With this in mind, it should come as no surprise that politicians have been appealing for their votes as we race towards a general election on 4 July. 

Around 35% of people in England live in rented accommodation, according to the latest English Housing Survey. Sixteen percent are in social housing, while 19% are in private rented accommodation. 

Meanwhile, around 13% of people in Scotland and Wales are private renters, versus 16% in Northern Ireland. It should be noted that a lack of regular data in Wales and Northern Ireland means we have to rely on information from the 2021 Census, so these figures could have shifted slightly since then. 

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Meanwhile, there are currently around 2.82 million private landlords in the UK, based on income tax data from HMRC. That amounts to around 4% of the population. 

Against this backdrop, we look at the key policies each major party has promised when it comes to buy-to-let landlords and renters. How will a Labour or Conservative win affect you?

Housing is in focus this election season 

It’s not just the scale of the private rental market that has thrown it into focus this election season. As Maria Sobolewska, professor of political science at the University of Manchester, argues for the BBC, “the issues affecting renters have never been more visible politically”. 

Inflation and housing shortages have caused rents to rise sharply. Landlords’ mortgage costs have soared too, with many passing some or all of this cost on to tenants in the form of rent increases.

With this in mind, Sobolewska thinks renters could be instrumental in deciding the outcome of the election result. To this end, she compares Generation Rent to Margaret Thatcher’s “Essex Man”, New Labour’s “Mondeo Man”, David Cameron’s “Mumsnet Mums” and Boris Johnson’s “Workington Man”.  

In 2010, renters were fairly evenly split on whether they would vote Conservative or Labour, Sobolewska says, but since then they have been shifting towards the left. This could bode well for Labour leader Keir Starmer. Prime Minister Rishi Sunak’s promise to ban no-fault evictions suggests the Conservatives have not given up on winning their vote yet, though. 

Meanwhile, private landlords make up a smaller portion of the UK population at 4%, but their influence is by no means insignificant. Traditionally, they tend to be more Conservative leaning, and Rishi Sunak will be keen to secure their vote on 4 July. 

Landlords have seen their margins squeezed in recent years and any party which speaks to these issues may find it is able to curry favour. Extra stamp duty was imposed on private landlords in 2016 and, since then, tax reliefs have been scaled back. House prices also fell in 2023 as mortgage costs soared – a double whammy for property owners. 

Many landlords have been passing higher mortgage costs on to their tenants by putting rents up, but research suggests rents are now hitting an affordability ceiling. This suggests landlords may struggle to raise them much further. Combined with a tighter regulatory landscape, this is leaving some landlords questioning whether buy-to-let is still worth it. 

What the election could mean for renters 

Before the election was called, the Conservative government had hoped to abolish no-fault evictions through its Renters Reform Bill. The policy did not make it through in time, but has since been picked up in the Conservative Party manifesto. 

Labour, the Liberal Democrats and the Green Party have also stated their commitment to abolishing no-fault evictions. Reform UK, on the other hand, would not look to abolish this measure. Instead, the party has said it would “boost the monitoring, appeals and enforcement process for renters with grievances”. 

As well as abolishing no-fault evictions, Labour has said it would empower tenants to challenge unreasonable rent increases. The party has also promised to raise living standards in rented accommodation, for example by extending ‘Awaab’s Law’ to the private sector. This measure (currently in place in social housing) requires landlords to investigate and fix health hazards like damp and mould within specified timeframes.

Other manifesto pledges include:

• Energy efficiency: Labour has said it will ensure homes in the private rented sector meet minimum energy efficiency standards by 2030, helping reduce energy bills for tenants. The Green Party has also promised to push for “a tenant’s right to demand energy efficiency improvements”. 
• Tenancy lengths: The Liberal Democrats have said they would make three-year tenancies the default. 
• Improving standards and regulation: The Lib Dems have said they would create a national register of licensed landlords. Meanwhile, the Greens have said they would introduce rent controls and “private residential tenancy boards to provide an informal, cheap and speedy forum for resolving disputes before they reach a tribunal”.   

What the election could mean for buy-to-let landlords 

While much of the focus has been on protecting renters’ rights, the Conservatives have doffed their cap to private landlords in their manifesto. As well as abolishing no-fault evictions, they have promised to “strengthen other grounds for landlords to evict private tenants guilty of anti-social behaviour”.  

In a surprise measure, the party has also promised to introduce capital gains tax relief on a temporary basis for landlords who sell to their existing tenants. Under current measures, landlords selling a rental property have to pay 18% capital gains tax if they are a basic-rate taxpayer, or 24% if they are a higher or additional-rate taxpayer.

Reform UK has been going after the traditional Conservative vote, and has also promised incentives for landlords. The party has said it would “restore landlords’ rights to deduct finance costs and mortgage interest from tax on rental income”. 

Tips for first-time buyers and buy-to-let landlords 

Whether you’re a first-time buyer or a buy-to-let landlord, MoneyWeek regularly shares tips on the steps you can take to make the most of your money. 

We regularly publish research on whether it is cheaper to buy or rent. While soaring mortgage rates made renting the more affordable option at one point last year, buying is now cheaper once again. The challenge for first-time buyers is saving up a big enough deposit. 

If you are keen to climb the property ladder but don’t have quite enough tucked away in your savings account, you could explore a 95% mortgage or a 30-year option. However, beware, these will usually cost you considerably more in interest payments.

If you are still saving for a deposit and want to boost the value of your pot, you could also look into a Lifetime ISA. You can put up to £4,000 in a Lifetime ISA each tax year and the government will give you a 25% bonus. 

There are some drawbacks on these accounts too, though. You can only use the money to purchase a first home up to the value of £450,000 or to save for retirement. If you access the money for any other reason, you will be hit with a 25% penalty.

Meanwhile, if you are a buy-to-let landlord, it is worth looking into which parts of the country are most profitable. Rents aren’t growing at the same rates everywhere, as we explored in a recent piece: “Best buy-to-let property hotspots in the UK”. 

Incorporating your properties in a company structure could also prove more tax-efficient – but it is important to consider the additional costs and responsibilities associated with setting up and running a property business. By setting your property portfolio up in this way, you could also expose yourself to higher mortgage rates.