Labour Party Proposes Reform Of Private Rented Sector

houses_020514Labour party leader Ed Miliband has announced plans to reform the private rented sector, if elected to government in 2015.

The plans are national but are particularly relevant to London. Our rents have been hitting insane levels and we’re seeing increasing numbers of ‘no fault evictions‘, where the landlord ends the tenancy because he or she wants to put up the rent. Labour plans to change tenancy rules, so that after a six month probation period, a contract would then run for two and a half years. If tenants want to move they would give a month’s notice; if a landlord wanted to evict they would have to give two months’ notice. Landlords could also only evict if they needed to sell the property or use it themselves, or if the tenant fell behind with the rent or was being anti-social. (Tenants would have the right to request shorter, more flexible contracts.)

Additionally — in what would be a very popular move — the party plans to end estate agents’ finders fees, and rent increases would be capped to an upper ceiling based on local market rates. Labour claimed the Royal Institution of Chartered Surveyors was working out a system, something RICS has since denied.

Former Conservative Housing Minister Grant Shapps dismissed the ideas as “‘Venezuelan-style’ rent controls“, but the country this most reminds us of is Germany. In the German private rented sector, rent rises are capped to 15-20% over three years, with no rise in the first year. They also have longer tenancies and more protection for tenants against eviction. This doesn’t necessarily mean everything’s fine, as landlords have been hiking rents in between tenants instead, driving up the market as a whole.

See also: How Rent Controls Work In Other Countries

Photo by charles kevin bramhall from the Londonist Flickr pool

Tags: , , ,

LondonistPortraits-14

Article by Rachel Holdsworth | 2,422 Articles | View Profile | Twitter

  • Richard

    I wonder if there a case for a special higher tax on buy to let properties? I reckon that might mean more properties are available for first time buyers. I would also like to see an end to the rental market being artificially inflated with public money poured into housing benefit and the release of council flats onto the private market but I doubt if labour would agree.

  • Bella J Ecclestone

    What happens if the tenant pays his rent but the landlord wants a new tenant? And you can’t stop agents from charging fees, their providing a service at the end of the day. Don’t want to pay them? Don’t use thier service? How do you expect agents to make money if you stop them from the way they make money? You’ll out agents out of business and then wonder what happened! How about actually seeing how the Lettings Buisness works then make new laws which gives the tenant more rights if their landlord is crappy? You can’t stop a landlord giving notice that’s why we now have AST contacts instead of AT contracts.

    • Danni Ashcroft

      Nobody wants to pay the agents anyway, they’re just middle-men taking a cut for doing bugger all.