If elected next May, the Labour party plan to introduce some quite sweeping policy changes in the private rented sector, most prominent of which are long-term tenancies and rent controls.
Here is some of the detail spelled out by Ed Milliband at a press conference in April 2014.
Introducing long term three-year tenancies:
Tenancies would start with a 6 month probation period at the end of which the landlord would be able to terminate the contract if tenant failed the probation (e.g. if there are rent arrears or anti-social behaviour).
After the 6 months, the tenancy would automatically run for a further 2.5 years
Tenants would be able to terminate contracts after the first 6 months with one month notice as they can now.
But landlords would be able to terminate contracts with 2 months’ notice only if they can have good reason:
– The tenant falls into rent arrears, is guilty of anti-social behaviour or breaches their tenancy agreement
– The landlord wants to sell the property, needs the property for their own or family use
– The landlord plans to refurbish or change the use of the property.
Landlords would not be able to terminate tenancies simply to put rents up.
There would be a provision that allowed landlords to enter into shorter contracts where they are contractually obliged to do so as part of a buy to let mortgage entered into before the start of this new legislation.
There would also be provision for new tenants like students or business people on temporary contracts to request shorter-term tenancies subject to the landlord’s agreement.
Landlords and tenants will set initial rents based on market value and conduct a rent review no more often than once a year.
Rents could still be reviewed upwards, downwards or stay the same, subject to market conditions.
But the legislation would place an upper ceiling on any rent increases to prevent excessive rises. This would be based on a benchmark such as average market rents. The Royal Institute of Chartered Surveyors is already examining what an appropriate benchmark might be.
Ban letting agents’ fees for tenants:
Landlords would continue to pay charges just as people selling houses pay fees to estate agents. But letting agents would be banned from charging fees of up to £500 to tenants.
This will save people entering into a new tenancy an average of £350.
Labour Party Policy Detail for Tenancies – If elected next May, the Labour party plan to introduce some quite swee… http://t.co/BAUmchnxTM
— LandlordZONE (@LandlordZONE) September 2, 2014