Saturday 1 October 2016

Labour plan wipes £200m off listed builders

Emily Gosden

Published 28/04/2015 | 02:30

UK Labour Party leader Ed Miliband delivers a speech at The ARC Theatre & Arts Centre in Stockton-on-Tees, where he announced that first-time buyers will be offered a tax break worth up to £5,000. Photo: PA
UK Labour Party leader Ed Miliband delivers a speech at The ARC Theatre & Arts Centre in Stockton-on-Tees, where he announced that first-time buyers will be offered a tax break worth up to £5,000. Photo: PA
STOCKTON-ON-TEES, ENGLAND - APRIL 27: Labour Party leader Ed Miliband addresses supporters during a campaign visit to Stockton Arts Centre on April 27, 2015 in Stockton-on-Tees, England. During his speech the Labour leader announced that under a Labour government first-time buyers in England and Wales would be exempt from paying stamp duty on homes costing less than £300,000. (Photo by Christopher Furlong/Getty Images)

Britain's housebuilders saw their share prices hit yesterday after Labour party leader Ed Miliband unveiled detailed plans to impose rent controls on landlords.

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Almost £200m (€279m) was wiped off the value of Taylor Wimpey, Barratt Developments and Persimmon after Sunday's announcement that Labour would bar private landlords from increasing rent by more than inflation for three years.

The plans will see buy-to-let investors pull out of the market as Labour makes it unattractive to rent out properties, experts warned - worsening the shortage of available housing for the so-called "generation rent" Labour says it wants to help.

The Association of Rental Letting Agents (ARLA) said three-quarters of its members feared the plans would "see landlords exit the market and reduce supply". Richard Lambert, head of the National Landlords Association, said: "We understand Labour wants to assure tenants they have their concerns at heart, but this policy will backfire because they don't understand the economics of supplying private housing to rent.

"These changes will have far-reaching consequences for the private rented sector, for landlords' willingness to put their own money into providing homes, and for mortgage lenders' view of the risk in supporting them.

"If these proposals are going to be rushed into the first Queen's Speech, less than a month away, without time to think through the consequences, Labour's good intentions could make the housing crisis worse, not better."

The British Property Federation has warned that the rent control plans "could deter much needed investment in the housing sector".

Melanie Leech, chief executive of BPF, said: "Ultimately what will help tenants best is more investment in housing.

"Pension funds and other institutions have billions to invest in this market -developing places that would provide a new generation of high-quality homes that offer greater choice to renters, including the option to sign longer tenancies.

"This additional investment will be vital to tackle the housing crisis, and we would urge the next government to do all it can to encourage it," Ms Leech added.

Irish Independent

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