Recently Ed Miliband pledged that a Labour government would protect private sector tenants by introducing big changes to the rental market. One Tory critic labelled this as “Venezuelan type rent controls”.
The current rental agreement offered to most tenants is a six month tenancy. Though the tenant can stay on after the six months, the landlord can terminate the arrangement by giving two months notice. Labour claims this fails to provide stability especially for families. There is also evidence of “retaliatory evictions” where a landlord terminates a tenancy after the tenant has complained to the landlord about lack of repairs.
So Labour’s main proposal is to introduce three year tenancy agreements. There would be an initial six month probationary period which would allow landlords to get rid of tenants who breach the agreement. After this period a landlord could only end the tenancy with two months notice only on certain grounds e.g. if the tenant was in arrears with the rent or was guilty of anti-social behaviour. After the end of the probationary period tenants could end the tenancy by giving one month’s notice to quit.
Other reforms include a ban on letting agents charging tenants excessive fees for the drawing up of a tenancy agreement and a new formula to prevent excessive rent increases.
Critics claim this is a re-run of 1970’s rent control and intervention and cite examples abroad where similar policies have failed. However, Labour denies this is a return to the past and says its proposals are based on reforms introduced in the Irish Republic. Some might say that one way of tackling the problem is to increase the number of properties for rent, thereby letting the market solve the problems.