Labour has set out its plans to attract private tenants’ votes for the forthcoming general election, with letting fees banned, longer tenancies and an end to “excessive” rent increases. They claim that tenants in total will be £2.5 billion better off under a Labour government.
According to Emma Reynolds MP, shadow Housing Minister, tenants have a raw deal, they have to work two days a week, the equivalent of working every day until the 28th May in the year, before they have paid their rent. In return for this they get no stability, poor standards and they have to pay hundreds of pounds in rip-off letting agent fees.
Labour says that with rising property prices there are many people, particularly the young, who they have termed “Generation Rent” cannot afford to buy a home. More than a quarter of adults under 30, they claim, are still living in the family home, and that almost three quarters of home owners are now aged 45 or over.
With an estimated 9 million voters now renting their homes from private landlords, many with families, Labour believes, need more protection. Crucially for the political parties, a high proportion of short-term tenants never bother to register to vote.
Exorbitant Letting Agent’s Fees
Labour claims two-thirds of renters use letting agents when they need a rental home and of these agents, 94 per cent are imposing charges for the tenant on top of a deposit and rent in advance.
The tenant’s fees range from an average of £350 to up to £500 according to Shelter, the housing charity.
Consequently, Labour plan to scrap these “rip-off” fees altogether, which they claim would save the average tenant £624 over the period of the next government. Labour have said they want to level the playing field between people who rent and those who buy.
Ed Miliband has said that people selling a home pay estate agents’ fees, while buyers don’t, “so why are people renting a home having to pay?” What he failed to acknowledge is that if you are selling you are usually buying as well, so you still pay fees.
The Residential Landlords Association (RLA), which represents private landlords in England and Wales, says landlords would simply increase rents to make up for the shortfall.
But the RLA has said it would prefer more transparency, so tenants know what they are paying in fees and where the money is going.
Shelter has said fees should all be charged to the landlord, rather than the tenant, but then, “If letting agencies do not absorb the costs they currently charge to tenants, landlords may be justified in increasing rents to reflect their additional costs. A small increase in rent spread across the tenancy is preferable for renters, who otherwise have to deal with sudden one-off costs to secure a tenancy.”
Long-Term Tenancies and Restrictions on Evictions
Labour have said they intend to introduce “default” three-year tenancies to give tenants more security and that this would achieve a better balance between tenants’ and landlords’ rights.
Only 56 per cent of private tenants are registered on the electoral roll to vote, according to Labour. It is therefore reasonable to assume, they claim, that people living in a property for longer, for several years, would be more inclined register and vote.
Labour says that landlords currently have a no fault route to evicting a tenant using the so-called “section 21” notice. This two months’ notice of intention to repossess a property – without having to explain why they are taking this action – is not fair according to Labour.
Any tenant complaining about damp and mould can be “kicked out” for insisting that the landlord deals with the problem. Under a Labour government, landlords would only be able to repossess their property if tenants are in arrears with their rent or behaving anti-socially.
Although it seems landlords would be committed to a three-year term once the agreement is signed, tenants would not have to commit themselves to that full term, being free to serve two months’ notice and leave after 6 months.
Introducing rent ceilings to ensure that tenants are protected from big increases in their monthly bills is another measure Labour plan to introduce. They say that rent ceiling would be based on inflation so that tenants have a better idea what they will be paying in future.
On the rent issue, the RLA has said that it should not be assumed that private sector rents are spiralling out of control. They claim that social rents (council and housing associations) have been rising faster in percentage terms than private rents, and that according to the English Housing Survey private rents have been falling in real terms, when you take inflation into account.
The RLA claims that most private landlords do not increase rents when a tenant stays put and that long-term tenants tend to pay lower rents than those who rented for short periods.
— LandlordZONE (@LandlordZONE) February 5, 2015