The tide turns for tenants

YOUR MONEY Thousands could obtain rent reductions in the wake of a U-turn by an appeal body. Paul Gosling reports

THOUSANDS of private tenants may be able to obtain large rent reductions on their flats and houses as a result of an out-of-court settlement just agreed.

A rent assessment committee (RAC) - a route of appeal for many tenants (and landlords) - has admitted it acted unreasonably in approving a huge rent increase.

More than 400,000 private tenants still have what are termed "fair rents", which means they are covered by a 1977 Act that allows appeals against rent increases through RACs and local authority rent officers.

But many of these tenants - who will have moved into their properties before 1989 - have in fact had large rent increases imposed in recent years by RACs. They may be able to use this out-of-court settlement to challenge other RAC decisions.

RACs are quangos, originally set up to protect tenants from rapacious landlords who increase rents unreasonably. But more recently they have been accused of buoying up rents as a way of implementing, by the back door, the Government's policy of encouraging more privately let properties. In London, four in five appeals to RACs in recent years have led to rent increases higher than those proposed by rent officer arbiters at local authorities.

The tenant in this case, Helen Holdsworth, a 72-year-old pensioner living in west London, obtained High Court approval in April for a judicial review of the decision of the London Rent Assessment Committee.

The RAC had last year given her landlord permission to increase her rent from pounds 1,600 a year to pounds 2,860. The landlord had appealed to the RAC against the decision of the local authority rent officer, who had assessed the rent at pounds 1,900. The property is described by Miss Holdsworth as a "damp, one-bedroom basement flat with no services, on a main road".

Miss Holdsworth claimed that the RAC's decision was wrong in ignoring other local rents, that it had failed to justify its decision, and had made an error in law in failing to accept that rents had been forced up by scarcity. Under the 1977 Rent Act, RACs are supposed to discount that element of the market rent that results from scarcity. The solicitor for the RAC has accepted that its decision should be quashed, because it had not sufficiently discounted scarcity and failed to give proper reasons for its decision. The RAC is also to pay Miss Holdsworth's legal costs.

Miss Holdsworth says: "Obviously it is very important, because it is the first test case of a tenant against a RAC. I am a bit disappointed not to have gone to court, because we would have won and it would have been more clearly a precedent, which was why we took the case. But it can still be used by other tenants, provided they know about it."

The case has been financed by individual donations, usually of pounds 5 or pounds 10 a time, by other tenants who now hope to get their own rents reduced. Many of those affected are retired people whose savings put them above the threshold for eligibility for housing benefit.

"Not many statutory tenants [those whose rents are controlled by the Rent Act] are on housing benefit, because they have savings," says Miss Holdsworth. "You don't get much benefit with pounds 3,000 savings and most of us have saved more than pounds 3,000 in our lives. I was a teacher, and most of our pension has to be taken as a lump sum, and you can never get housing benefit then." People with pounds 16,000 of savings are not entitled to any housing benefit.

Miss Holdsworth was one of a group of pensioners who had been unhappy with the increases imposed on "fair-rent" tenants, and set up the Campaign for Fairer Fair Rents. Over the five years to last year, rents controlled under the Rent Act rose by an average of 14 per cent a year. Before the outcome of Miss Holdsworth's case, the campaign had advised tenants not to appeal against rent officers' decisions because of the likelihood of the rent being increased further. The members of RACs are appointed by two government departments, the Lord Chancellor's Department and the Department of the Environment, and comprise a mix of lawyers, surveyors and lay people.

Tenants whose rental agreements have begun since 1989 are not subject to the "fair rents" system, and are not affected by Miss Holdsworth's case. New tenants are now usually given assured shorthold tenancies, often lasting six months although they can be longer, and rents are agreed by negotiation between landlord and tenant. These tenants have been able to appeal to RACs in some circumstances where they consider the rent unreasonably high, but the Government now intends to abolish this facility as well as potentially reducing housing benefit paid (see panel).

Deregulation of housing rents has led to big increases for people who are on these assured shorthold tenancies. Many have their rent paid by housing benefit, which has been reflected in a doubling in the housing benefit bill in the past six years.

Louise Ayriss, policy officer of the Chartered Institute of Housing, which represents housing professionals, says the impact of Miss Holdsworth's case could be significant for long-term tenants. "It is welcome, especially as the tenants are often very elderly and vulnerable, and have been in their properties all their lives. But it is a declining tenancy type."

The Department of the Environment would not comment on the implications of Miss Holdsworth's case. A spokesman said: "Fundamentally, RACs are independent."

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

Ashdown Group: Chief Technology Officer (CTO) - Glasgow

£90000 - £98000 per annum + benefits : Ashdown Group: A truly exciting opportu...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food