Labour plans to cap rents to give “Generation Rent” a more secure future

Ed Miliband has announced plans to cap private sector rents as part of a package of plans to help those living in the expanding private rented sector. The plans are pretty similar to those unveiled before last year’s European and Local elections (which I praised at the time). They’re also similar to the rent pledges pushed by Shadow Housing Minister Emma Reynolds back in February (which may suggest that the media gives a disproportionate amount of coverage to policies announced by party leaders – even if they’ve largely been announced before).

But there is some important new detail in Miliband’s rent announcement – here are the key points:

• Cap rents so they cannot rise by more than the rate of inflation (CPI) during secure three-year tenancies .
• Require landlords and letting agents to disclose the rent levels charged to previous tenants so that householders can negotiate the best possible deal at the start of their contract. (This one is new – and will mean the worst examples of price gouging by landlords at the start of tenancies will be pretty transparent)
• Penalise rogue landlords by reducing buy-to-let tax relief for those who own hundreds of thousands of properties which do not meet basic standards. (This is new too – and hits landlords in their pockets).

These new announcements follow previous measures – including secure three year tenancies and banning letting agents from charging fees to tenants – that have already been announced. And it makes up a pretty strong package that will tangibly improve the private rented sector for the millions who rely on it, whilst the homes the country needs are being built. What it isn’t though (to the disappointment of many in the party no doubt) is “rent controls” – Labour won’t be setting the rent levels for specific areas or types of homes (Miliband’s market interventionism has limits), but the right-wing papers will still call it “rent controls” anyway.

Here’s how Miliband announced the plans:

“Britain only succeeds when working people succeed. But for so many people, life is tougher than it need be – not only at work – but also at home.

“Generation Rent are the young, families with children and middle income earners who being are priced out of the housing market.

“Labour will build the homes which local people want to buy. But we will never turn our backs on Generation Rent. And we want to encourage all those responsible landlords who provide decent homes for people and stable income form themselves.

“Too many people are struggling to meet the costs of putting a roof over their head. Some are saving for a deposit year after year, decade after decade, while the dream of owning their own home seems further and further away. Others are having to move all the time, ripping up the roots they have laid down at work or with friends, even having to change their kids’ schools.

“Labour has a better plan. The security of three year tenancies for all who want them with rents capped, so they can fall but not rise by more than inflation. The rights they need to negotiate a decent deal with landlords and stop rip-off letting fees. And the protection for taxpayers and tenants against bad landlords who are being subsidised for providing accommodation that fails to meet basic standards.

“This is a plan for a stable, decent, prosperous private rental market where landlords and tenants can succeed together.”