Labour will bring back rent controls and ban landlords from increasing charges by more than inflation
04-27-2015
- Ed Miliband will announce the left-wing policy during a speech today
- He will report rents are now £1,200 more expensive than in 2010
- The Labour leader said he will introduce secure three-year tenancies
- However, critics claim the plan will reduce the available rental stock
By Darren Boyle for MailOnline
Ed Miliband will announce plans to freeze the price of rent for three years if he can form the next government
Private landlords would be banned from above-inflation rent rises over a three-year period if Labour wins power after the May 7 General Election, Ed Miliband is set to announce.
The move forms part of a plan to help the growing number of people - known as Generation Rent - who are stuck in rented accommodation as home ownership falls to its lowest level for 30 years.
Landlords and letting agents would be required to disclose the rent paid by previous tenants, to allow renters to negotiate the best possible deal at the start of a contract.
And rogue landlords would lose buy-to-let tax relief if properties do not meet basic standards.
Speaking ahead of a speech on Sunday in which he will spell out details of the plans, Mr Miliband described Labour's blueprint as 'a plan for a stable, decent, prosperous private rental market where landlords and tenants can succeed together'.
But Communities Secretary Eric Pickles retorted on Twitter with a quote from economist Assar Lindbeck: 'Rent control appears to be the most efficient technique presently known to destroy a city except for bombing.'
Labour has already announced plans for secure three-year tenancies for all those who want them, to protect tenants in a short-term private market where default agreements currently last just 6-12 months.
Now Mr Miliband is promising that over the course of a three-year contract, rents would be capped so that they cannot rise by more than the CPI rate of inflation.
Labour is also offering to ban letting agent fees to tenants, which the party says would save the average renting household £625 over the next Parliament. And it has said it will establish a national register of private landlords to enable the identification of those whose properties fall below basic standards.
Some 11 million people - including 1.5 million families with children - rent their homes, and many do not fit the old image of young singles and couples saving to buy their own home. Almost 50% of private tenant households are aged over 35.
In a survey, 66 per cent of private renters said they would like the option of staying in their homes for longer and 79 per cent said they would like more predictable rents, said Labour.
Labour said that average rents are £1,200 higher now than they were in 2010, and letting agents' fees have added an average of £355 to the cost of renting a property. Rents can jump suddenly, with amounts charged in the constituency of Ealing Central, in west London, soaring by 14 per cent last year.
Labour claims that rents are now £1,200 higher than in 2010 while letting agents' fees add a further £355
Eric Pickles, right, said rent control is the most effective way of destroying a city - bar bombing it
Mr Miliband said: 'Britain only succeeds when working people succeed. But for so many people, life is tougher than it need be - not only at work - but also at home.
'Generation Rent are the young, families with children and middle-income earners who being are priced out of the housing market.
'Labour will build the homes which local people want to buy. But we will never turn our backs on Generation Rent. And we want to encourage all those responsible landlords who provide decent homes for people and stable income form themselves.
'Too many people are struggling to meet the costs of putting a roof over their head. Some are saving for a deposit year after year, decade after decade, while the dream of owning their own home seems further and further away. Others are having to move all the time, ripping up the roots they have laid down at work or with friends, even having to change their kids' schools.
'Labour has a better plan. The security of three-year tenancies for all who want them with rents capped, so they can fall but not rise by more than inflation. The rights they need to negotiate a decent deal with landlords and stop rip-off letting fees. And the protection for taxpayers and tenants against bad landlords who are being subsidised for providing accommodation that fails to meet basic standards.'
Conservative housing minister Brandon Lewis said: 'Ed Miliband is re-launching a policy that descended into chaos when it was first announced - the experts he claimed backed his plans came out and attacked it as unworkable.
'Rent controls never work - they force up rents and destroy investment in housing, leading to fewer homes to rent and poorer quality accommodation. Even Ed Miliband's own shadow housing minister admits they don't work. And an SNP-run Ed Miliband government will put our economy at risk, meaning fewer homes and higher rents.
'The only way to have affordable rents is to continue to build more homes. Thanks to our long-term economic plan, house-building is now at its highest level since 2007 and we will now go further by building 200,000 starter homes for first-time buyers and extending Right to Buy.'
Campbell Robb, chief executive of homelessness charity Shelter, said: 'No longer just a stepping stone, millions of families are now having to bring up children in a rental market that is not fit for purpose, where short-term contracts, sudden rent rises, and huge lettings fees are all too common.
'For a long time Shelter has campaigned for a new five-year tenancy in which rents can't rise by more than inflation, so any move that brings this nearer is welcome. Politicians from all parties need to be giving renters more stability, alongside building the many more affordable homes we desperately need.'
Liberal Democrat spokesman Lord Paddick said: 'Labour's plans are ill-thought through and will make things even worse for tenants.
'The only way to keep rents under control and stop house prices from spiralling is to follow the Lib Dem plan of building 300,000 homes. Rather than reduce rents, Labour's plans will lead to huge rent hikes every three years, higher rents overall and fewer available rental properties.'