Labour’s proposed tenancy policies will hit landlords in the pocket

The new Labour lead Government have indicated that they wish to introduce a number of new regulations to help renters. Some good and some not so good.


Starting with the good, the government wish to bring in laws to ensure homes are warm and dry. We deem this to be a good thing as there are landlords out there that simply don’t seem to care about the state of their properties. In these homes, tenants do suffer from being cold and living in substandard conditions which should not be happening.


The proposed banning of charging letting fees to tenants will result in landlords incurring these costs like in many overseas counties like Australia. This is a further increase in costs to landlords along with increase in notice periods to tenants from 42 to 90 days, upgrading of homes to meet new laws and limiting frequency of rent increases.


The labour government have also indicated that they wish to ring-fence investment property from a tax perspective and disallow investors to off-set losses on this class of investment against their yearly income. This method essentially results in investors losing the tax portion of the loss they incur by running an investment property.


What labour in our opinion don’t seem to grasp is that landlords and investors alike will be increasing rents across the board to cover increased costs immediately upon these laws being passed. This in-turn will result in increased costs to tenants.


Below are some of the policies proposed:

  • Increase 42-day notice periods for landlords to 90 days to give tenants more time to find somewhere else to live
  • Abolish the “no-cause” terminations of tenancies
  • Retain the ability of landlords to get rid of tenants who are in breach of the tenancy agreement with 90 days’ notice, or quicker by an order of the Tenancy Tribunal
  • Limit rent increases to once per year (the law currently limits it to once every six months) and require the formula for rental increases to be specified in the rental agreement
  • Give tenants and landlords the ability to agree tenants on a fixed term lease of 12 months or more can make minor alterations, like putting up shelves, if they pay double bond and on the basis the property is returned to the state it was in at the start of the tenancy
  • Ban letting fees to be charged to tenants
  • Require all rentals to be warm, dry, and healthy for families to live in by passing the Healthy Homes Bill
  • Give landlords access to grants of up to $2000 for upgrading insulation and heating


Source: Labours policy website


Labour are saying that the above policies have been designed with international examples in mind to get the balance between tenants and landlords right.


Labour believes it will make renting safer and healthier. Furthermore, their policies will help families stay longer in rental properties. This in turn will help tenants to establish roots in their community, and improve their children’s education by staying at the same schools longer. With having healthier homes will stop kids getting sick and dying of preventable diseases.


The proposed notice periods will be used where a landlord requires the following:

  • Requires their home back to move into
  • Vacant possession where the property has been sold
  • The tenant has breached the agreement such as anti-social behaviour, failure to pay rent, or causing damage to the property
  • Landlord does not wish to continue a fixed term tenancy past its expiry.


These proposed changes still allow property managers/landlords to take action with tenants whom are in breach of their agreement by utilising the Tenancy Tribunal process.


None of the above policies have been implemented to date. The Labour led government has indicated that it intends to act quickly on these policies to get them through parliament.


At Inspire we work for the landlord however, we work hard to get the best outcome possible for both parties to ensure our clients have well-managed and protected properties as well as tenants having safe and secure homes to live in.


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