Neil Duncan-Jordan: ‘Renters’ reforms are welcome, but should cap in-tenancy rent’

The Renters’ Rights Bill returning to the House of Commons for its report stage today marks a once-in-a-generation moment – the biggest change to private renting since the Conservatives’ 1988 Housing Act.

Thatcher’s reforms aimed to rejuvenate private renting by making it more attractive to landlords – but instead they helped sow the seeds of the housing crisis we see today. 

England’s 12 million private renters face some of the worst quality housing in the developed world, with shocking levels of damp and mould, and low rates of insulation resulting in health problems and unaffordable energy bills.  

READ MORE: No fault eviction ban proposed under Labour’s new Renters’ Rights Bill

Instead of producing competitive and affordable housing, decades of tipping the scales towards landlords has resulted in homes that are insecure, eye-wateringly expensive and often short term in nature. 

While renters in neighbouring countries like Germany enjoy secure, long-lasting tenancies with rights to redress should things go wrong, tenants in England can be put out on the street by a no fault eviction (or ‘section 21’) if they complain about a leaky roof or broken boiler.

Closing the rent hike loophole

After the previous government’s failure to get basic renting reforms passed – including the long awaited abolition of section 21 – Labour are taking action in government. 

This legislation will end exploitative bidding wars that drive up rental prices, stamp out discrimination on renting to families with children or those on benefits, and give renters the right to request pets in their home.

With section 21 finally consigned to history, tenants will also benefit from longer notice periods, giving them more security in their homes. And introducing Awaab’s law to the private rented sector will hold landlords accountable for health hazards in their properties. No longer should tenants and their families suffer damage to their health because a landlord refuses to act.

READ MORE: Labour manifesto housing, rent and property policies – at a glance

However, to truly deliver a more secure future for renters in England, the bill needs to close a loophole that would allow no-fault evictions to continue via rent hikes. That’s why I’m supporting Paula Barker MP’s amendment to cap in-tenancy rent rises. 

The amendment introduces a cap on the amount a landlord could raise the rent on a sitting tenant, so that no-one will have to face a rent hike higher than wage growth or inflation.

Only capping rent increases can provide genuine security for tenants

Everyone deserves to have basic security in their home, whether they rent or own. People with mortgages (Truss mini-budgets notwithstanding) tend to have relatively predictable costs. Tenants have no such peace of mind.

Today, there is nothing to protect tenants from extortionate, unjust rent hikes – the Renters’ Rights Bill doesn’t do enough to change that. Last year, a government survey of landlords found rent increases of 15% or more when renewing or extending a contract were common. 

Despite the bill’s passage, renters who cannot afford extortionate rent hikes will continue to have no alternative but to move, fall into debt, or face eviction. 

And there is a real danger that landlords will continue to evict tenants or threaten them with eviction at will – with unfair rent increases taking the place of section 21 evictions.

READ MORE: The five key policies for renters set out in Labour-commissioned report

The Bill’s provisions to allow renters the right to appeal to a tribunal (that can determine a ‘market rate’ increase) are insufficient. By definition, ‘market’ rates are already unaffordable for many renters. 

Only capping rent increases will give renters genuine security in their homes and stop landlords from threatening vulnerable people with unaffordable rent hikes – or homelessness.

Rent is rapidly becoming unsustainable 

Beyond security, the biggest issue most renters face is the fast growing cost of having a home to live in.

The amount of income families in this country are losing to rent is rapidly becoming unsustainable. Nearly two thirds of working renters in England struggle to afford the rent according to recent research by Shelter.

Rent produces almost zero social benefit – it takes money away from working class people who would spend it in their community, and passes it to property owners.

What simpler, more effective way could there be to ease the cost of living crisis for millions of people, and put money back in their pockets, than by limiting their largest outgoing? 

Catching up with our neighbours

Rent stabilisation measures are common across Europe – in France, the annual increase is limited to 3.5%. Meanwhile in England rent has been rising faster than wages for well over a year, and the average annual increase reported in December was 9.3%.

A cap on rent increases has the support of housing charities, renters’ organisations and major unions including Unison and the NEU. Polling shows it also has strong public support.

When it comes to the housing crisis, we must keep all options on the table, and back this change to the Renters’ Rights Bill.

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