Labour’s proposals will deter buy-to-let investors

The partner at Moore Blatch Solicitors in Southampton said: “[Labour’s proposal] risks creating a supply shortage, which in turn either drives up rents or, if prevented by government legislation, drives down standards.

“History shows that government intervention in controlling rents only damages investment in the market.”

Launching his party’s local and European election campaign in Redbridge, London, Labour leader Ed Miliband said a future Labour government would cap rent increases, as well as scrap letting fees to estate agents to give tenants a “fairer deal”.

Article continues after advert

Mr Walshe said it would make buy-to-let investors less likely to invest in the sector.

He said: “The current regime gives them certainty that, if the fixed term has ended, they can get their property back. Labour’s proposals threaten that certainty and, coupled with restrictions on rent, will create a disincentive for buy-to-let investors, who make up the majority of the private rented sector.”

Adviser view

Ruth Whitehead, director of London-based Ruth Whitehead Associates, said: “Whatever you think of buy-to-let investors, the market needs them. They need to put in a substantial investment, so it is all about return and the yield they are likely to get each year. If it is not a viable return, then they are more likely to invest elsewhere.”