Ed Miliband to pledge rent limits for private tenants if elected
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Wednesday 30 April 2014
The nine million people living in private rented housing would have their rent rises capped by an incoming Labour government, Ed Miliband will announce on Thursday.
He will promise to rescue “generation rent” by giving people greater security with three-year tenancies. Rent increases will be limited to a benchmark figure based on the average market rise. It would be illegal for landlords to exceed that or terminate tenancies to put up rents.
The proposals will be controversial. Labour officials insist they are not a return to the “big brother” rent controls of the 1970s but the party will face criticism that its reforms would undermine the buy-to-let market. Labour would allow landlords to enter shorter contracts when they are contractually obliged to do so as part of an existing buy-to-let mortgage.
Mr Miliband will unveil his housing policy at the launch of Labour’s campaign for the local authority and European elections on 22 May. Although the Euro elections have attracted most attention because the UK Independence Party hopes to top the poll, the four main parties are also putting huge efforts into the battle for 4,216 seats in 161 councils in England. Elections take place in all 1,851 seats in the 32 London boroughs; 815 seats in metropolitan boroughs, including many traditional Labour strongholds; 394 seats in 19 all-purpose unitary councils and 1,156 seats in 74 district councils, normally seen as Conservative heartlands.
The results will matter as they will emerge on 23 May, two days before the European Parliament election results are announced in all 28 EU member states.
All four parties face big challenges in the local elections. The Conservatives will hope their humiliating expected third place in the Euro polls will be tempered by a stronger performance in the town hall elections. They will be looking for signs that the economic recovery is starting to pay electoral dividends in the North, where the party will need to do much better to retain power at next year’s general election.
Conversely, Labour will be looking to make gains in the south. Some Labour MPs fear that Mr Miliband has not yet cured his party’s “southern discomfort” and will need to do better in the south to win an overall majority next year. London will be a crucial battleground, not least because it includes 73 parliamentary constituencies.
The Liberal Democrats have suffered heavy losses in local elections since joining the Coalition in 2010, losing about 40 per cent of their seats, and are bracing themselves for another setback next month. This could add to the pressure on Nick Clegg and make it harder to retain the party’s 57 parliamentary seats next year with fewer councillors on the ground.
Ukip did well at the local elections a year ago and will be hoping to show again that it is more than a “one-issue party” on Europe. It is targeting working class voters and hopes to emerge as the main challenger to Labour in the North at next year’s election, after performing well in parliamentary by-elections in the region since 2010.
Labour will put living standards at the heart of its election effort. Mr Miliband will argue that high rents are contributing to the “cost of living crisis”. He will promise that Labour would ban letting agents’ fees for tenants, saving people entering a new tenancy an average of £350.
Tenancies would start with a six-month probation period, after which it would be extended for another two-and-a-half years unless the landlord had reason to terminate it. Landlords could end contracts with two months’ notice if they had good reason, such as rent arrears or antisocial behaviour.
Mr Miliband will say: “We need to deal with the terrible insecurity of Britain’s private rental market. Many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice with no reason. Some are told to accept huge rent rises or face eviction. It breeds instability and that is bad for tenants, bad for families, bad for landlords, and bad for our society.”
Labour officials insist that similar caps on rents have worked in Ireland without ruining the private rented sector. But the Tories accused Labour of proposing “Venezuelan-style rent controls”. Grant Shapps, the Tory chairman, said: “This is another short-term gimmick – political tampering from Ed Miliband. Evidence from Britain and around the world conclusively demonstrates that rent controls lead to poorer quality accommodation, fewer homes being rented and ultimately higher rents – hurting those most in need.”
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