1 May 2014

Generation rent: Labour pledges tenants’ rights shake-up

Labour leader Ed Miliband is proposing reforms of the private rented sector, with three-year tenancies, limits on excessive rent rises and a ban on letting agents charging fees.

At the launch of Labour’s local and European elections campaign in Redbridge on Thursday, Mr Miliband said that the price of renting a home is “one of the biggest causes of the cost of living crisis in our country”.

There has been a big increase in private renting in recent years, with this sector overtaking social housing for the first time. According to the 2012-13 English Housing Survey, 18 per cent of people now rent privately, compared with 12 per cent in 1980.

Nine million people and 1.3 million households in England are now renting privately, and almost 50 per cent of private rented households are over the age of 35.

Private rents are rising twice as fast as wages and the National Housing Federation says that by 2020 they could be 46 per cent higher than today.

Having pledged to freeze energy bills if Labour wins the next election, Mr Miliband is turning his attention to housing.

‘Generation rent ignored’

He said that “generation rent is a generation left ignored and insecure for too long”, adding: “Nine million people are living in rented homes today, over a million families, and over two million children. That is why a Labour government will take action to deliver fairer deal for them too.”

He will promise to tackle “the terrible insecurity of Britain’s private rental market” by making three-year tenancies “the standard in the British private rented sector”, compared with current assured shorthold tenancies of six to 12 months.

Ed Miliband also proposes limits on increases landlords can charge, and an end to fees of up to £500 charged by lettings agents when tenants sign a new contract.

In future, tenancies would start with a six-month probation period, after which the landlord would be able to bring it to an end if there are rent arrears or anti-social behaviour. Assuming there are no problems, the contract would continue for another two-and-a-half years.

Tenants would be able to end contracts after the first six months with one month’s notice, as they do now. Landlords could terminate contracts with two months’ notice if they have problems with their tenants or want to re-occupy or sell their property.

In future, rents would be set based on market value and reviews could not be carried out more often than once a year. There would be an upper limit imposed on potential rent increases to prevent excessive rises.

‘Venezuelan-style rent controls’

The Conservatives accused Mr Miliband of planning to introduce “Venezuelan-style rent controls”.

Party chairman Grant Shapps said: “This is another short-term gimmick – political tampering from Ed Miliband. Evidence from Britain and around the world conclusively demonstrates that rent controls lead to poorer quality accommodation, fewer homes being rented and ultimately higher rents, hurting those most in need.”

Rent controls were abolished in 1989 and landlords are free to charge what they want/whatever tenants will pay. A severe housing shortage and an increase in the number of people renting, because they cannot afford to buy, have also helped fuel a rise in rents.

Tenants' rights when rents keep rising - the key questions