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
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones