The private rented sector offers flexibility to landlords but very little stability for tenants, writes Tom Copley.
The private rented sector offers flexibility to landlords but very little stability for tenants, writes Tom Copley
James lives in Bethnal Green. When he renewed his contract this year the landlord demanded an increase of more then 20 per cent, and refused to give him a contract of more than twelve months.
Francois lives in Camden. He moved into a shared house and paid a month’s rent and deposit in advance. When he arrived at the lettings agency to sign the tenancy agreement they demanded another month’s rent as their “fee”.
I have heard countless stories like these from Londoners. Whether it’s landlords hiking up already exorbitant rents, rip-off lettings agency fees or retaliatory eviction when tenants make legitimate complaints about the state of the property, the private rented sector offers plenty of flexibility to landlords but very little stability for tenants.
Londoners feel this more than anyone else. More of us rent from a private landlord here than in any other part of the country – a full quarter of the residents of our city – and home ownership has now dropped below fifty per cent. That’s why Ed Miliband’s announcement of private sector tenancy reform this morning will be cheered to the rafters across the capital.
The next Labour government is now committed to longer, three year tenancies as standard with annual rent increases capped. Labour will also move England and Wales into line with Scotland and ban lettings agencies from charging tenants fees.
These changes would be the most significant changes to private renting since Margaret Thatcher abolished rent controls and introduced Assured Shorthold Tenancies in 1989. The Thatcherite model of private renting will finally be ripped up and replaced with a system that rebalances tenants’ rights with those of the landlord.
This reform is very welcome and long overdue. Currently, most private tenancies last for six months or a year, and landlords can evict tenants for no reason at just two months’ notice.
No doubt landlords will be apoplectic with Ed Miliband’s proposals. They’ll scaremonger that more regulation will drive landlords out of the market altogether. Just this week research commissioned by the Residential Landlords’ Association even called for existing regulations to be weakened, including abolishing deposit protection – one of the only positive reforms to private renting in recent years.
Don’t listen to them. So long as renting is still profitable (and let’s remember that since 1996 they’ve made on average a 16.3 per cent annual return on their investment) they will continue to rent to tenants. Britain currently has one of the least regulated private rented markets in Europe. Even with Ed Miliband’s reforms the sector will still be far less regulated than in Germany, where sixty per cent of the population rent from a private landlord.
It’s an oft repeated fallacy that the private rented market only grew once rent controls were lifted. In fact, in the decade following the abolishion of rent controls the sector didn’t grow at all. It was the introduction of buy-to-let mortgages in the late ’90s that kicked off the boom in private renting.
There is still more that could be done to make renting better for tenants, but Miliband’s proposals represent a major, major step forward.
Tom Copley AM is Labour London Assembly Member (Londonwide)
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5 Responses to “Miliband is ripping up the Thatcherite model of private renting”
treborc1
I have tried to comment twice hope third time lucky.
Ok so the private renting sector will get something from labour, the fact is people would not need these private landlords if we have more social housing. is that to much to expect.
Build more social housing not affordable but Council housing.
Amanda Stannard
I totally agree, we need more social housing, not private landlords making a profit at the public’s expense. Typical, Tory policy, a few grow fat on the misery of the many!
Edward
Labour have also committed to end “affordable rent” and return to “social rent” for council and HA properties.
Grouchy Oldgit
Good interim measure but I hope Labour is not just diluted Thatcher in looking to the for-profit sector to house the masses. Private rental is a poor solution for housing those that can’t afford to buy. A relative few people will end up owning many houses, while many people end up being beholden to the few. Private renters have few rights and a private rental can never be considered “home”, no long-term security, can’t even re-paint or hang pictures! Long-term solution must be return to council homes for all who need them, council housing worked well, gave people stability and dignity, and should never have been sold off.
thefridge
In areas of lower rental demand and areas with lower rental costs per month as 3 year term would be just what landlords who rent to benefit tenants want.
No more ‘tenant farming’
No more benefit claiming tenants staying in one place for 6 months then moving on – leaving a mess behind them.
the tenant would have agreed to let a house for 3 years and the housing benefits -on some cases – would pay direct.
A nice bit of security for the landlord who rents to benefit tenants.