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Labour: Three year tenancies and rent control
Landlords will be hundreds of pounds a year worse off under new plans to be announced by Ed Miliband.
The Labour leader will set out proposals for three year tenancies, with only limited rent rises permitted in that period. Rip-off letting agent fees for tenants would be banned.
The new proposals, aimed at “Generation Rent”, are meant to give tenants greater protection against rogue landlords and make renting more affordable.
The plans could affect tens of thousands of buy-to-let investors and other property owners, as housing becomes one of the key battlegrounds in the run-in to the May election.
Mr Miliband will say that Generation Rent – the 9 million people renting homes across the country – were being “ignored and let down by this government.”
He will promise three year tenancies to give families “security and peace of mind”, as the number of people unable to get on the housing ladders grows.
“The amount needed for a deposit on a home has risen beyond the reach of millions of young people and families starting out,” Mr Miliband will say. “As well as building more houses and helping people get on the property ladder, a Labour government will take action immediately to make life better for all those renting their home.”
The Minister for Housing and Planning Brandon Lewis said that Labour’s rent control proposals showed the party was in chaos, warning that freezing rents would harm the housing market. Rent controls were blamed for damaging the property sector during the 1960s and 1970s.
“First their energy price freeze collapsed when it was shown it would lead to higher prices and now their flagship policy to help tenants would actually lead to higher rents. Labour are in chaos,” said Mr Lewis.
Mr Lewis said that the Conservatives would invest in house building instead, which would lead to more affordable rents.
“Rent controls never work – they destroy investment in housing leading to fewer homes to rent and poorer quality accommodation,” said Mr Lewis.
Emma Reynolds, the shadow housing minister, will warn that tenants are getting “a raw deal” and that house building had fallen to the lowest level in peacetime since the 1920s under the Coalition government.
“A Labour Government will introduce three year stable tenancies, put a ceiling on rent rises over the course of the contracts, ban letting agent fees on tenants, drive up standards and tackle poor energy efficiency,” she will say.
According to the Residential Landlords Association (RLA), over a third of tenants stay in a home for less than a year before moving on. Fewer than 20 per cent of tenants rent a home for more than five years.
One of the first moves of a Labour government would be to ban letting agent fees charged to tenants, saving the average renter £624 over five years, according to their calculations.
According to the housing charity Shelter, the average cost of letting agency fees in 2013 was around £350, which covers credit checks, references and administration. However, the fees are extremely variable, with some people paying up to £500.
RLA research shows that the average renter would move 2.7 times during every five-year Parliament, meaning they repeatedly pay out on agency fees.
