The House Party?

by Property 118

13:49 PM, 29th August 2019
About A year ago

The House Party?

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The House Party?

Which political party has been best for tenants and landlords?

Independent letting and sales agent, Benham and Reeves, has looked at which political party has had the most impact on the UK rental market and which way you might want to be voting depending on whether you’re a landlord or tenant.

Benham and Reeves looked at the average rental cost across England between the joint tenure of Labour’s Tony Blair and Gordon Brown between 1997 and 2009 and during the more recent reign of Tory duo, Cameron and May.

The Tories have seen the highest average rent during their time in power at £767 per month. This is an increase of £218 or 34.1% on the average monthly rent between 2010 and 2019 – a 3.4% jump each year.

When splitting it between David and Theresa, David presided over the greatest hike in rents of both Tory leaders. In his six years in charge, the average rent was £717 per month and increased a total of 23.1%, an average of 3.9% per year. On the other hand, rents under Theresa did average £848 per month but only increased by 2.3% in her four years which is just 0.6% a year on average. Great for tenants for sure. But for landlords? Not so much.

On the face of it, Labour’s time in power was far more tenant-friendly with the average monthly rent hitting just £437 over the 13 years since Tony Blair took over in 1997. But when looking at the growth of rents during this time the figures tell an entirely different story. When Labour came into power, the average monthly rent was just £334 but by the time Gordon Brown left Number 10 this had soared by 86.9% to £624 per month. That’s an increase of £290 per month and an average yearly hike of 6.7%. ‘For the many, not the few’? Where rents are concerned, perhaps that’s debatable?

While Tony oversaw a rental increase of 39.67% in nine years, this averages out at 4.4% a year, while Gordon Brown’s rental increase of 28.8% averages out at a huge 7.2% during his four years.

So there you have it, Gordon Brown destroyed rental affordability while Theresa was the best of the bunch and now we have Boris – you don’t know what you’ve got till it’s gone.

But what about landlords?

Yields have dropped during the time both parties were in power due to almost continuous house price growth, averaging 4.5% per year under both Labour and the Conservatives.

However, they fell by an average of -2.6% per year from 1997 to 2009 under Labour – a total fall of -33.61%, but just -0.3% per year under the Conservatives, down -2.8% in total.

Blair oversaw the largest average yearly yield at 4.9% but saw a total drop of -3.4% during his time as PM, a fall of -0.4% per year.

Gordon oversaw the lowest average yearly yield at 3.8% per year but yields actually climbed 1.2% in total, a lift of 0.3% a year.

David Cameron and Theresa May saw a similar uplift in yields averaging 4.6% and 4.2% per year, both seeing a small increase during their time as PM and, with no average yearly growth under Cameron but a 0.1% uplift for each year under May.

Director of Benham and Reeves, Marc von Grundherr, commented:

“Probably not the first criteria that you would consider when deciding on your political allegiance but politics and a party’s housing plans can have a big impact on issues of supply and affordability within the rental market, so who you vote for could very well impact upon your personal living arrangements.

We’re not taking sides either way, but on the face of it, Labour has been the most questionable party in power if you’re a tenant struggling with rent affordability, while in terms of investing in the buy-to-let sector, flip a coin as they’re all as mediocre as each other really.”

Rents
Government Period Average Rent During Tenure Total Change (%) Yearly Rental Increase (%)
Labour 1997-2009 £437 86.9% 6.7%
Conservative 2010-2019 £767 34.1% 3.4%
PM Years as PM Average Rent During Tenure Total Change (%) Yearly Rental Increase (%)
Gordon Brown 4 £564 28.8% 7.2%
Tony Blair 9 £381 39.7% 4.4%
David Cameron 6 £717 23.1% 3.9%
Theresa May 4 £843 2.3% 0.6%
Yields
Government Period Average Yield During Tenure Total Change (%) Yearly Yield Change (%)
Labour 1997-2009 4.46% -33.6% -2.6%
Conservative 2010-2019 4.54% -2.8% -0.3%
PM Years as PM Average Yield During Tenure Total Change (%) Yearly Yield Change (%)
Gordon Brown 4 3.8% 1.2% 0.3%
Tony Blair 9 4.9% -3.4% -0.4%
David Cameron 6 4.6% 0.2% 0.0%
Theresa May 4 4.2% 0.2% 0.1%

 

Sources:
Prime Ministers in power Wikipedia

 

Private Rents Gov source2
  CCHPR source3
  Statista source4
  Gov source5
  Gov Archive source6
Av. House Price Gov / Land Reg source7

 


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Comments

Bristol Landlord

23:32 PM, 29th August 2019
About A year ago

I think this article is delusional.
It’s more than about average rents, it’s also about whether the PRS is a safe investment for landlords.
UK PRS has gone from a reasonably low risk investment to now a high risk investment and all under the watch of Tories.
The Tories have been attacking Landlords for years now with changes to tax rules and passing very landlord unfriendly laws. Also proposing to cancel S21 eviction laws and the last straw is Brexit.
My tenant in London has just told me he is leaving because his company is moving his office to Amsterdam, that’s a direct personal impact of Brexit on me.
I always knew the Tories were a greedy and stupid party intent on serving the best interests of the 1% but I never imagined they would be such morons as to actually **** on their own doorstep which is what they are doing to the London property market.
So tell me again, the Tory Party is better than the Labour Party because????

Denise G

9:48 AM, 30th August 2019
About A year ago

What a ridiculous article! Where are the comparable year-on-year or PM on PM figures for rent as a percentage of income or those for annual wage increases or for inflation or for .... etc.? So many other figures have a direct impact on, and therefore affect, the amount of pound notes paid over as rent or received as rental income, as to make a direct comparison of those amounts on their own a totally irrelevant nonsense!

LCH

10:15 AM, 30th August 2019
About A year ago

Reply to the comment left by Bristol Landlord at 29/08/2019 - 23:32
I agree.

LCH

10:16 AM, 30th August 2019
About A year ago

Reply to the comment left by LCH at 30/08/2019 - 10:15
The Tory's should be pro-PRS but have been anything but.

Dennis Leverett

11:35 AM, 30th August 2019
About A year ago

What a load of cobblers, just proves that you can prove anything with statistics either way depending on what you forget to include and what your agenda is. Best forward this Polly I think!!!

Michael Barnes

1:41 AM, 31st August 2019
About A year ago

Rents should be adjusted for inflation to have any real meaning (and possibly by average income).

And average percentages do not work like that.
The yearly average is not Total Change % (T) divided by number of years (Y), it is the Nth root of (1+T)


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