Today, Labour announced an election pledge to protect private renting tenants through a number of legislation promises:
- Ban charges by letting agents on tenants to sign a tenancy agreement
- Make three year tenancies the standard in the private rented sector (PRS)
- Limit the amount rents can go up each year within tenancies
The detail within these policies are:
Tenancies would start with a 6 month probation period, at the end of which the landlord could terminate the contract if tenant failed, e.g. with rent arrears or anti-social behaviour, or breaking the terms of the tenancy
Landlords can terminate the tenancy if tenants fall into arrears, are guilty of ASB, breach the tenancy agreement, or if the landlord wants to sell the property, refurbish the property, or use it for their own or family use.
Landlords will set initial rents based on market value and conduct a rent review no more often than once a year
Legislation to place an upper ceiling on any rent increases to prevent excessive rises, based on a benchmark such as average market rents
These are of course all welcome signs from the Party that is leading current polls. And any legislation that would cut fees, cap increases, and increase stability and security are to be supported against our current abysmal system.
But the question arises will these initiatives go far enough to really protect renters? Estate agents and landlords have far more resources to understand the law for their own purposes than tenants, and there are some gaps in Mr Miliband’s announcement that should make private renters worried.
If estate agents are banned from charging tenants for tenancy agreements, will they be equally banned from charging for financial background checks, inventory checks, holding deposits? A ban on one with an increase in the others will not have an impact our on wallets.
If tenancies are three years long, will the entrance requirements for a tenancy get worse? Will landlords accept people on contracts, on low wages, on housing benefit, who are disabled or require care, who are self-employed? Discrimination is already rampant in the PRS, if landlords don’t believe they can easily get rid of tenants will their demands for the ideal tenant intensify?
If rent increases are limited within a three year tenancy, will landlords simply make a bigger hike between tenancies? For those who want to stay for six, nine or more years, will this actually improve their financial situation, or just delay the inevitable?
And finally, and most importantly, why are rent increases still linked to market value? This will be a great move for those outside of Greater London, but for those of us within the M25 market value is linked to the ever increasing demand for London property as an asset for the international and domestic rich.
There are no signs that the market value acceleration of London properties will slow down – in fact it was one of the few pockets of capital that was relatively unscathed by the 2008 financial crash. Rent increases linked the market value will not make London homes any more affordable, any more fair, or any less of a drain on Londoners’ already tight finances.
We need more for private rented homes to be affordable and for realistic rents based on incomes rather than what the rich are willing to pour into property development in the capital.
We should of course support the intentions of Labour to improve the situation of private renters (especially in contrast with the response of raging scare against Reds/ Socialists/ Marxists/ Stalinists/ Venezuelans from the Conservatives). But we should not accept that this is the perfect situation being handed to us by a Labour party that had 12 years to do something about the housing situation and fundamentally failed.
This is not a situation that arose in the last four years, it has been a decades long problem for private renters and Labour are as culpable as the Conservatives and Liberal Democrats in its deterioration. This is a positive first step towards improving the private rented sector, but there is a long journey to be had towards a fair and equitable system for renters.