Labour vows aid for generation rent
Labour put help for "generation rent" households at the heart of its campaign for this month's elections, with a promise of more secure long-term tenancies, the abolition of letting fees and a cap on rent rises in the private sector.
The proposals, unveiled by Ed Miliband as part of a signed "cost-of-living contract" with voters, came under attack from the property industry, which warned they would make landlords less willing to invest and could even force rents up. And Conservatives claimed the plans were "unravelling" after a leading surveyors' organisation denied it was drawing up rent benchmarks, as Labour had suggested.
But Mr Miliband's initiative was backed by housing charities, with Crisis saying that reform of the private rental market was "long overdue", while Shelter said it represented a "very welcome recognition that private renting has now become a way of life for hundreds of thousands of families, thanks to our desperate housing shortage".
Launching his party's campaign for the May 22 local and European elections in Redbridge, east London, the Labour leader said that housing costs were one of the biggest causes of a "cost-of-living crisis that Britain hasn't seen for as long as anyone can remember".
"The vital link between the wealth of the country as a whole and ordinary family finances has been broken," said Mr Miliband.
"People are working harder, for longer, for less, with a few at the top getting the big rewards, insecurity at work for the many. And the promise of Britain, that the next generation should do better than the last, being broken. That is the reality that people face."
Under Labour's proposals designed to prevent rogue landlords forcing people out by hiking rents, property owners would be forced by law to keep rises below a set level.
Letting fees - which the party said cost tenants an average £350 - would be abolished.
And people would be guaranteed a three-year tenancy as long as they paid the rent on time and were not guilty of anti-social behaviour during the first six months.
Labour sources said rent caps would be based on benchmarks such as average market rents in the area, and briefed reporters that the Royal Institute for Chartered Surveyors was already examining what an "appropriate" benchmark might be.
But the institute's head of policy, Jeremy Blackburn, said: "RICS is not developing proposals on rent benchmarks for the private rented sector, and we do not recommend that a government introduce a ceiling on rent increases.
"Labour is right to talk about 'generation rent', but arbitrary caps are not a solution."
Labour pointed to a consultation being carried out by RICS in collaboration with the Government's Communities Department on a proposed code of conduct for the private rented sector, which includes a suggestion that rent reviews " could be linked to inflation or average earnings, to a fixed uplift each year or to market rents".
"RICS are developing proposals on long-term tenancies and rent reviews linked to inflation or market rents as part of their Code of Practice for the industry," said a Labour source.
"We will look to build on their conclusions as we work with the industry to implement this policy in government."
Conservative chairman Grant Shapps said: " This is just another opportunistic gimmick from Labour. Just four months ago their housing spokesman was saying that rent controls wouldn't work, now she's promising to introduce them in government."
British Property Federation director Ian Fletcher said that institutions investing in housing would feel "extremely nervous" about the prospect of rent controls, which he said made "no sense".
"Good landlords will be getting a perverse message that if you are providing a premium product the most you can expect is the 'average', whilst bad landlords with sub-standard accommodation can find another justification for charging over the odds," warned Mr Fletcher, who said there were already mechanisms in place to deal with "dodgy" rents.
Ian Potter, managing director of the Association of Residential Letting Agents, said he was "deeply concerned that Labour has today announced a series of ill-thought-through proposals which will have an adverse effect on tenants in the private rental sector".
But Leslie Morphy, chief executive of homelessness charity Crisis, said: " Longer tenancies are something we have long called for. Recent research for Crisis highlights the damage done to tenants on short contracts who face being thrown out when they request repairs or their landlord wants to put the rent up. Abolition of arbitrary and often hidden letting agents' fees will also do much to protect poorer tenants, for whom such fees can cause devastation and in some cases even homelessness."
And Campbell Robb, chief executive of Shelter, said: " Shelter has long campaigned for modern, stable rental contracts that help families put down roots, as well as a ban on unfair letting agent fees. The fact that both the Labour Party and the coalition Government have now committed to improving renting is an important moment for 'generation rent'."
Unite union general secretary Len McCluskey said: "People need to know that the house they rent is their home and that they will have the peace of mind that comes with three-year security of tenure.
"These moves coupled with Labour's pledge to build 200,000 houses a year, with a strong emphasis on council and social housing, should raise the quality of housing available and bring down the punishing cost of renting."
In a venue decorated with banners bearing the party's new slogan - "hard-working Britain better off" - Mr Miliband said: " With families at risk of being thrown out with two months' notice for no reason, w ith some even told to accept huge rent rises or face eviction, t he insecurity and instability of the private rental market is b ad for tenants, bad for families and even bad for landlords."
He rejected comparisons with systems of state-set rents, pointing out that landlords and tenants would be free to set initial rents but with restrictions on rises over three years. A similar system introduced in Ireland 10 years ago had led to an increase in the size of the private rental market, rather than a reduction, he said.
Communities Secretary Eric Pickles said: "A voluntary, sector-led, best practice model tenancy is better and the complete opposite of legislating to introduce statist rent controls.
"Evidence from around the world shows that statist rent controls simply don't work - they won't keep rents down, they will just reduce choice for tenants and lead to landlords running down their properties."