The Labour party’s proposals to cap rent rises with inflation and insist on three year tenancies in the private rental sector continue to be criticised by many in the industry.

The Association of Residential Letting Agents claims that 72 per cent of its member agents believe that the proposals will see landlords pull out the market, and lead to a decrease in the supply of rental property. 

The association’s latest month report shows the feeling is particularly strongly held in Labour heartlands such as the North West and East Midlands where 84 per cent of ARLA agents express concern.

Some 74 per cent of ARLA members believe the proposals will make it more difficult to evict tenants and will not actually benefit tenants at all.

On the other hand, only 37 per cent agree that the Conservatives’ pledge to build 200,000 new starter homes offered at 20 per cent discount to first-time-buyers would be best for the private rented sector. 

“Flexible tenancies are what makes the sector work. If this changes, some landlords will be forced to exit the market and tenants are likely to automatically incur rent hikes and feel driven to stay in agreements for longer before getting on the housing ladder; thus not freeing up rental properties for other tenants” insists David Cox, managing director of ARLA. 

Lucy Morton, a former ARLA president who now runs the JLL-owned W A Ellis lettings office in Knightsbridge, suggests the Labour proposals may deter domestic and foreign investors who “not only underpin the property market but also generate a huge income into UK PLC.” 

Meanwhile the Residential Landlords’ Associations says that the Treasure argued in February 2010 – before the end of the last Labour government – that rent controls when previously in place “reduced investment in the sector, contributing to…lower maintenance standards in the stock that remained.”

The RLA also claims that Labour’s communities minister in Wales, Lesley Griffiths AM, in February of this year told the Welsh Assembly that rent controls “reduce the incentive for landlords to invest and can then lead to a reduction in quality housing.”