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Labour vows house rents 'fair deal'

Labour would cap private sector rent rises, ban letting agents charging tenants fees and introduce three-year tenancies, Ed Miliband will promise as he launches the party's campaign for the European and local elections.

The Opposition leader will point to housing costs as "one of the biggest causes of the cost of living crisis" and warn that increasing numbers face "terrible insecurity" at the hands of unscrupulous landlords.

With his party trailing Ukip in several opinion polls and facing the prospect of finishing behind the Eurosceptic party, Mr Miliband will also insist Britain's best interest lies in reforming the European Union from within not quitting Brussels.

And he will accuse the Conservatives of celebrating better economic news while remaining "utterly unaware" of the challenge facing families struggling with housing and other bills.

On a visit to Redbridge, north-east London, to formally begin campaigning for the May 22 polls, Mr Miliband will set out a series of proposed reforms to the private rented sector, declaring that "G eneration Rent...has been ignored for too long".

"Nine million people are living in rented homes today, over a million families, and over two million children. That is why a Labour government will take action to deliver fairer deal for them," he will say.

Labour proposes to legislate to ban the charges imposed on tenants by up to 94% of agents - averaging £350 but going as high as £500.

In a bid to prevent people being forced out of their homes by huge rent hikes, landlords will be restricted to one review a year and required by law to keep it below a set level.

Details of how that ceiling would be calculated are yet to be resolved - with Labour saying it is being examined by the Royal Institution of Chartered Surveyors.

But sources said it could be based on average rents across an area or inflation.

Homeless charity Shelter had examples of people faced with the choice of paying an extra £70 a week or eviction, they said.

Under the proposals, tenants would get a three-year deal so long as they paid the rent on time and were not guilty of anti-social behaviour in the first six months.

Landlords could only serve them with two months' notice to leave with "good reason" such as rent arrears, anti-social behaviour or breaches of the tenancy agreement or because they needed the property to live in or to refurbish.

"We need to deal with the terrible insecurity of Britain's private rental market," Mr Miliband will say.

"Many tenancies last just six months with families at risk of being thrown out after that with just two months' notice with no reason. Some are told to accept huge rent rises or face eviction. It breeds instability and that is bad for tenants, bad for families, bad for landlords, and bad for our society.

"T he next Labour government will legislate to make three-year tenancies the standard in the British private rented sector.

"These new longer-term tenancies will limit the amount that rents can rise by each year too - so landlords know what they can expect each year and tenants can't be surprised by rents that go through the roof.

"This is Labour's fair deal for rented housing in Britain: long-term tenancies and stable rents so that people can settle down, know where the kids will go to school, know their home will still be there for them tomorrow."

Next month's polls and the 2015 election represent an " historic choice between two totally different visions of how a country succeeds, of how we can build a better future for the hard-working people of Britain, of who our country is run for", Mr Miliband will declare.

"We've got a government utterly unaware of the true nature of the challenge Britain's families face.

"As the Tories try to go on a lap of honour about how well everything is going the reality for hard-working people here in Redbridge, and right across the country, is they are struggling to keep up - or are falling behind - trapped in a race to the bottom, stuck with wages that don't come close to covering their bills, caught in the crosshairs of a cost of living crisis the like of which we haven't seen before."

Pressure on Labour to commit to holding a referendum on the UK's continued membership of the EU is certain to intensify if Ukip tops the polls on May 22.

Mr Miliband will say: "We will work to reform Europe now, putting growth and jobs at the heart of the European Union, making sure the European Budget is spent in a way that supports British business, and insisting that the EU helps clamp down on tax avoidance by the largest companies."

Conservative Party chairman Grant Shapps dismissed the policy as "another short-term gimmick".

"Evidence from Britain and around the world conclusively demonstrates that rent controls lead to poorer quality accommodation, fewer homes being rented and ultimately higher rents - hurting those most in need. And it's yet another Labour policy bought by Ed Miliband's union boss, Len McCluskey," he said.

"The only way to raise people's living standards is to grow the economy, cut people's taxes and create more jobs. We have a long-term economic plan to do that, Ed Miliband doesn't.

"All Ed Miliband does offer is more of the same old failed Labour policies from the past - more spending, more borrowing and more taxes. That would put jobs, the recovery and the security of Britain's future at risk."

But Labour dismissed the comparison with rent controls and said a similar policy had already proved effective in Ireland over the past decade.

Mark Littlewood, director general at the Institute of Economic Affairs, said: "Rent controls are the wrong solution to rising housing costs in the UK. Labour have identified the problem of spiralling living costs, but this solution defies economic logic. Historically, such policies have been disastrous for tenants.

"Allowing rents to increase each year by only a benchmark of average market rents will prevent the efficient allocation of housing, creating dangerous distortions the higher the level at which the averages are calculated.

"Removing rent from market rates will create perverse incentives for landlords in areas where market rents rise quickly. Aside from creating unnecessary layers of bureaucracy, this policy may lead to landlords being uncooperative in the hope that tenants leave early. The consequences will be at the disadvantage of exactly the people the policy is intended to help.

"The key factor behind high cost renting is the lack of supply of homes where people want to live. Labour's proposals to hold down rent increases will do nothing to alleviate this. To deal with high housing costs politicians must urgently liberalise the UK's draconian planning laws."

Campbell Robb, chief executive of homeless charity Shelter, said: "This is 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.

"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'.

"Renting used to be a stepping stone for students and young professionals, but today one in every five families in this country rents their home from a private landlord.

"No parent should be bringing up children in a broken rental market where six-month contracts, sudden rent rises, and huge lettings fees are the norm.

"With housing now regularly polling as a top five issue, voters want to see a convincing offer from all parties that genuinely promises to bring a decent home back within their reach."

But Chris Walker, head of housing and planning at the think tank Policy Exchange, said: "Capping rents could potentially lead to landlords simply withdrawing from the market if they don't get the price they need to make their investment economically sound.

"This could subsequently create shortages in the market."


From Belfast Telegraph