The Green Party has committed to abolishing landlords. At its conference in Bournemouth, party members passed a motion that would make seeking the “effective abolition of private landlordism” official policy.

The motion said that landlords added “no positive value to the economy or society” and that the “relationship between landlord and tenant is inherently and intrinsically extractive and exploitative”.

Party activists backed making all rental agreements long-term tenancies that can be terminated only by the tenant. Tenants would also be given first right to buy when a landlord sells, with their “total rent paid discounted” and government-backed financing provided. Councils would be given second right to buy.

The plan is now official policy for the Green Party of England and Wales.

Under the terms of this policy, more regulation and taxes would be thrust onto the shoulders of private rentals with the Greens making it difficult for landlords to make a profit by imposing rent controls, ending buy-to-let mortgages and levying national insurance on rental income. As the name of the motion implied very explicitly, these policies are designed to shrink the proportion of the housing market that is privately rented.

Leaving aside how wrong it is to assume all rental agreements or landlords are exploitative, almost a fifth (19%) of all households live in privately rented properties according to the latest English House Survey, making it the second largest type of housing. There are an estimated 4.6 million households renting privately in the UK, with 2.5 million landlords.

Compared to other tenures, the sector is younger and more ethnically and nationally diverse. This would be a catastrophic shock to the lives of those tenants, their landlords and, indeed, to the whole of the country’s housing sector – a sector that is already in a state of crisis.

Not only that, this strikes at the core of the lending and broking professions. It is worth bearing in mind how damaging even rent controls (let alone ending BTL mortgages) have been when they have been tried in other places like Berlin.

Germany introduced a five-year rent cap for new builds if the residential space is used and rented for the first time after 1 October 2014 all apartments built before 2014 that came into force around 2020. In stage one of the scheme, which went into effect in February 2020, the rents for 1.5 million flats were frozen at their level of June 2019. In November, when stage two kicked-in, landlords were obliged to reduce any rents that exceeded by 15% newly defined caps. Any future contracts would have to stick within the caps.

A study by the German Institute for Economic Research found rents in the newly regulated market of flats built before the deadline declined by 11% compared with the still-unregulated market for newer buildings. But the problem, entirely foreseeable and foreseen, is that the caps have made the city’s housing shortage much worse: the number of classified ads for rentals fell by more than half. Landlords started to use flats for themselves, sold them or simply kept them empty in the hope that the court would overturn the new regulation.

Framing these policies as tenant-friendly ignores the well-documented knock-on effects on the housing sector. These policies risk exacerbating the housing shortage; with one in five English households reliant on private rentals, an exodus of landlords would spike demand for the properties left in the rump of the sector. And the standard of remaining properties may fall as money for investment dries up.

You may think these proposals are unlikely to become law, but they deserve continued attention from buy-to-let professionals.

The Green Party of England and Wales has grown its membership and representation, now reporting 150,000 members with four MPs. With rising visibility and support in key areas, such as London, it’s housing policies could start to attract a wider political debate.

Some of these ideas may also influence future government decisions.  It has been reported that the Chancellor, Rachel Reeves, has considered a similar proposal to apply NI to rental income.  If measures like this move forward, they could affect landlord profitability and prompt some investors to review their portfolios.  For lenders and investors, staying alert of this policy development is a sensible part of managing market and regulatory risk.

Mark Michaelides is the CCO of specialist mortgage lender Molo