Creating a private rented sector based on long-termism and responsibility

December 10, 2012 12:01 pm

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Today we’re launching the second in a series of housing policy papers on the private rented sector. This document sets out how Labour will give stability and financial certainty to private renters, including over one million families with children. We propose to give families and other renters the opportunity to access longer term tenancies allied to predictable rents.

In our first document we called for reform to the lettings and management agents market. While many letting and management agents provide an important service and act responsibly, too many unscrupulous agents rip-off tenants and landlords alike. This means that tenants and landlords don’t get a fair deal and the many responsible agents are undercut and their reputation undermined.

Too often, unjustifiably high charges are applied to both tenant and landlord and they have little financial protection or recourse to complain and many face difficulties in contacting agents and getting repairs undertaken.

We’ve proposed steps that should be taken now to stop irresponsible agents operating and end the scandal of rip-off fees. But while a reformed lettings market can be part of the solution to the wider problem, we recognise that it is just one part of the change that is needed to ensure the private rented sector meets the needs of the increasing number of people living in it.

That’s why this week we’re proposing further reforms that will provide renters with the stability and the certainty they need. The evidence shows that at present the instability of the private rented sector can mean higher costs as renters pay admin and other charges to move home as well as higher rents. Recent reports have also highlighted the other costs of instability including the detrimental impact on educational attainment, the reinforcement of poor standards, a greater risk of homelessness and impacts on community cohesion.

The truth is the current model just doesn’t provide families with the stability and the certainty they need. Our proposals will create a private rented sector based on long-termism and responsibility so that families can have the stability and security they deserve.

We will provide access to longer term tenancies allied to predictable rents for renters and families so they can plan ahead and manage their household budgets. And while landlords’ business models will benefit from longer term tenancies and predictable rents, Labour will work with the sector to develop a range of possible incentives that will form part of a “something for something” deal for landlords.

But we don’t propose stopping there. In our next Policy Review paper on the private rented sector we will turn our focus on how to drive up standards. In a sector where billions of pounds of taxpayers’ money is spent every year through housing benefit, it cannot be right that some tenants are plagued by rogue and slum landlords. We will set our plans to drive out the rogues and drive up standards across a sector where 37% of homes are non-decent.

Despite the scale of the problems, from letting agents ripping people off to instability that hits kids education, the Tory-led Government has no plans for change. On taking office, Grant Shapps the then Housing Minister scrapped the last Labour’s Government’s modest proposals on letting agents, written tenancy agreements and a national register for landlords, labelling them as “red-tape”.

This approach is typical of an out of touch Government that simply doesn’t understand the lives of most people. A Government that dismisses such basic protections as a written tenancy agreement as “red-tape” can never be the One Nation Government the country needs.

Labour on the other hand is committed to reforming the energy companies, the banks, and the train operators so they work for working people. And on housing you can add lettings agents and the private rented sector as a whole to that list.

With longer term tenancies and predicable rents, the private rented sector will offer the affordable and stable homes that renters need. Families will feel that their rented house is a home and it will help strengthen communities as people put down roots and get to know their neighbours.

Labour’s One Nation housing policy offers stability for families, certainty for good landlords and strengthened communities.

Jack Dromey is the Shadow Housing Minister

  • http://www.facebook.com/profile.php?id=514409408 Colin McCulloch

    Good work from Labour on this issue. Throw in a couple of million social tenancies and we’ll be well on our way to fixing the housing crisis.

  • pjackson

    Couldn’t agree more. Longer term tenancies, as in Europe, provide the security families, and agents need. It would encourage tenants to do improvements to their homes too. As far as rip off prices charged by Agents, ie £60 to remove a deceased partner from the tenancy agreement, £120 admin fees…£50 to renew a 6 month rolling tenancy.

    I would like to see the ‘No DSS’ made illegal too. many families on ‘DSS’ are working, tax paying families…why should they be discriminated against ? In addition, contact numbers for Agents should be normal charge numbers, not premium rate numbers.

  • PaulHalsall

    Germany has a robust private letting sector. They key is rent control that does not lead to the distortions seen in New York.

    And we need to find a way to have high rise apartment houses (as in NYC and much of Germany). The essential attributes that such buildings need are nearby local shops, 24 hours concierges, and cameras in the elevators.

    We made huge mistakes with Ronan Point type buildings here in the UK, but high rise buildings on real streets with shops on the ground floors is a model that works elsewhere.

    And Cameras should ensure that people who piss in the lifts get punished quickly.

  • Quiet_Sceptic

    On the face of it this appears a genuinely good move, I wonder if the housing policy will also address some wider issues about the private rental sector:

    – What does Labour believe the optimal/acceptable size of the private rented sector is ie. should we be content to see continual growth at the expense of owner-occupation?

    – Longer term, if private rental becomes a long-term housing solution for more and more families (as an alternative to owning), what would Labour do about pension provision to ensure those renting can house themselves in their retirement without: a, increasing pensioner poverty because of higher housing costs and b, huge cost increases on the state for housing benefit support.

  • jaime taurosangastre candelas

    I hope very much this policy review considers the option of Government-funded development of social housing, funded with perhaps an issue of 75-year “National Housing Bonds”. It is only the Government which can issue debt over that long-term, and so “amortise” the payback by charging lower rents. Everyone else, from individuals, private landlords, even councils can only access 25 year funding, and so the rent charged is much higher per month. As a bonus, any houses built on a 75 year bond would have to have certain architectural and structural longevity to persuade the investors, and therefore not be of the poor quality of most public building projects that seem to me to be made of cardboard (you should see our new patient waiting area – it might blow away in the wind, it is so poorly and cheaply built). So the houses would actually be nice places in which to live.

    Historically, the average of new housing developments is maybe 200,000 a year, and that only just copes with “new” demand. Building 200,000 homes a year will therefore do nothing to bring down the rents because demand is always at the level of supply. So a “smart approach” is needed.

  • AlanGiles

    It sounds as if Mr Dromey has given up on the main idea which would solve the problem of unscrupulous private landlords – that is, a large scale programme of council house building, needed more than ever in this age of low paid, short term contract and insecure jobs. Such a programme was mooted by Gordon Brown in June 2007, but of course, they were mere words which came to nothing.

    Sorry Jack you are going to have to do better than this to win The Woman MP of the Year Award……

  • Daniel Speight

    There were good reasons for building council houses after the war and it wasn’t only because of bomb damage. Reducing the power of private landlords was high on the list. The need hasn’t changed.

  • Daniel Speight

    There were good reasons for building council houses after the war and it wasn’t only because of bomb damage. Reducing the power of private landlords was high on the list. The need hasn’t changed.

  • MonkeyBot5000

    It would encourage tenants to do improvements to their homes too.

    No it wouldn’t. There is no way in hell that I am going to spend money improving a building when I don’t have any financial claim over it. I pay enough money in to my landlord’s pension each month as it is.

    Besides, doing anything to the building could breach your tenancy agreement – I’ve lived in places where you weren’t even supposed to put blu-tack on the walls.

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  • http://twitter.com/52Landlord Landlord 52

    Jack Dromey is making the same mistakes as Ken Livingstone. Ken based his Mayoral campaign on a propaganda war against Landlord. Many of the things Ken said were unfair and untrue. If everything Ken has been TOLD about Landlords was true, then why did n’t Ken win the London Mayoral election on a a landslide?.

    Ken was given a dishonest view of the private rental sector, which did not resonate with voters. The people who are campaigning on Twitter / Facebook keep repeating the same lies in the hope that if it is repeated enough times, it is taken as fact.
    Consider, this, if every landlord was a bad, as some of the campaigner say. Then why do we have tenants on housing benefit?. Most of them would be evicted in favour of private tenants on market rents. The reality most landlords are responsible. Most tenants are happy with their landlords.

  • http://twitter.com/52Landlord Landlord 52

    “In a sector where billions of pounds of taxpayers’ money is spent every year through housing benefit, it cannot be right that some tenants are plagued by rogue and slum landlords.” – Jack Dromey
    Hello????? The last Labour Government introduced the LHA scheme. This is where the tenant gets the housing benefit and is supposed to pay the rent to their Landlord, which often does not happen as the money is spent on other things. If the tenant is not using the money on rent, then the Government should claw back the billions from the tenants.

  • http://twitter.com/52Landlord Landlord 52

    Jack Dromey seems unaware problems faced by landlords. Properties are returned back to Landlords in terrible condition or sometimes wrecked. It is a national scandal.
    Finding good tenants is a challenge. There is no incentive for tenants to keep the property in good condition, especially at the lower end of the market.

    Labour want to give tenants secure tenancies. I don’t have an issue with this in principle, however, I don’t want to be stuck in a difficult relationship with a bad tenant who mistreats my property and expect me to constatly repair malicious damage.

    I wonder those who claim retaliatory evictions are the ones who have caused malicious damage. If relationship breaks down between a landlord and tenant. There has to be an amicable divorce.

    If Labour manage to drive out the Private Rental Sector out (which is what it seems they are intent on doing.). The private landlords will not return. As financing is both difficult and expensive.Landlords currently need a 40% deposit. On a £300,000 house, that is £120,000 deposit, which is out of reach.

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