Landlords React to Labour’s Election Win 2024

Landlords are greeting the Labour landslide of General Election 2024 with some trepidation.

Prime Minister Keir Starmer is about to announce his new government, and whoever takes the housing hot seat will inherit some problematic legislation kicked down the road by former Levelling Up and Housing Secretary Michael Gove as too challenging to deal with.

Top of the list is a revamped version of the Renters (Reform) Bill, which Gove dumped when the election was announced.

He had spent months rallying support from more than a hundred Tory MPs and peers who thought scrapping Section 21 was a step too far for their property businesses.

Labour has promised to revive the bill - but not word-for-word and with stricter rules for landlords.

CGT concerns

Another thorny piece of legislation is what to do about apartment leaseholds. Again, Gove had a stab at scrapping the feudal laws but stopped at abolishing them for houses but not flats, which comprise 69 per cent of the 4.5 million leasehold homes.

Capital gains tax is another concern for property investors.

Labour has confirmed that income tax, national insurance, and VAT will not increase but has not mentioned capital gains tax.

Raising CGT rates in line with income tax rates is an obvious way to generate more money for the Treasury.

Income tax rates are 20 per cent at the introductory rate and 40 per cent at the higher rate.

CGT rates for landlords are charged at an 18 per cent basic rate and 28 per cent top rate.

Planning pledge

Planning rules will be scrutinised as Labour pledges to build 1.5 million new homes and introduce mortgages with smaller deposits for first-time buyers.

Rent caps are also in the mix. Some Labour thinkers raise the possibility, while others claim they don’t work.

Expect London Mayor Sadiq Khan to lead the fight to limit rents as he has campaigned long and loud for Labour to adopt the policy.

Politically, Labour holds the upper hand, with a majority of 291 over the Tories and 176 over all other parties. Such an overload guarantees Labour’s policies will win even if every opposition MP votes against them.

Outside Westminster, the situation is more fraught. The election turnout was 60 per cent, with 35 per cent voting for Labour and 24 per cent for the Conservatives.

Many of the seats won by Labour have large swings to the left but slender majorities. This should straitjacket Labour away from the hard left as MPs may fear losing their seats next time around.