Labour pledges to fix private renting

With the news that private renters could hold the deciding vote in 86 seats at next year's election, political parties are realising that they need to win them over. 

First to make a move is Labour, whose leader, Ed Miliband, will announce plans on Thursday to introduce new laws to:

  • extend the standard length of a tenancy to 3 years
  • ban letting agent fees
  • cap rent rises

We're very pleased with these plans, which will finally start to prise away the grip that landlords have over the lives of the country's 9 million renters.

No longer will families be forced to move their children out of a home they've grown up in by a landlord who decides to raise the rent.

No longer will young workers be slapped with spurious admin fees for a new tenancy.

And no longer will a renter with a broken washing machine or boiler fear requesting repairs because of the threat of retaliatory eviction.

Renters are too often made to feel like inconvenient guests in someone else's home. If these changes are made, renters be able to make the building they live in their home and the street they live in their community, which will radically change how it feels to rent privately. 

We are looking forward to seeing the detail when it comes out, but this change of direction has been long overdue, and we hope it sets a benchmark for the government as it develops its Model Tenancy Agreement.

With Labour's opening bid for 9 million private renters' votes on the table, it's now up to the other parties to decide whether they too will court renters and how they will beat Labour's offer.

Showing 11 reactions

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  • commented 2014-05-12 21:29:06 +0100
    Christine, please could you give the source of your statement regarding tenant satisfaction? 83 versus 81 % " Government sources". Either way your promotion of the Private Rented Sector is somewhat confusing.

    My point is that private landlords get around £8 billion a year from housing benefit. Tax payers money goes into the pockets of wealthy landlords. Perhaps they are onto a good thing. There is income coming in, capital appreciation and a good business. Yes indeed money generates money.
    But private landlords buy up properties which inflates the price of houses putting them out of the reach of first time buyers.

    I feel that Thatcher has a lot to answer for. The social housing stock is inadequate as is affordable housing stock. Here is an article that you will not agree with -
    http://www.independent.co.uk/voices/commentators/owen-jones-i-can-afford-to-pay-the-rent—most-people-cant-7661562.html

    I was asked to be a guarantor for a tenant. This was to perhaps cover the risks of letting to a student. Letting agencies really do like to cover all risks. Any comments on this?
  • commented 2014-05-12 10:26:20 +0100
    I accept your apologies. Your comments would have been more appropriate on other more relevant blogs on this site and I would have answered you there. I believe that should be enough said on that point here.
  • commented 2014-05-12 09:09:34 +0100
    Christine! Absolutely no personal attack on you was meant at all. Many apologies if it seemed so. I meant it far more generally and objectively. We’re getting lots of feedback from agents saying they’ll be under pressure to make the money up. I just find it hard to believe that without a functioning supply/demand dynamic, that agents have voluntarily kept their prices down. The only way to really understand it would be to compare letting agency salaries and profits to comparable roles.
  • commented 2014-05-12 08:59:13 +0100
    Alexander.
    The Guardian article talks about culture. An example of cultural difference from our experiences would be we had a German tenant who wanted to keep spending her own money on making “improvements” such as increasing the height of a fence to improve her privacy in the garden, without consulting us first paid for installation of a hardwood external door of front door quality on the back door (we had planned and implemented a modern replacement composite back door and stored her door for her), wanted to paint the whole interior of the house before we stopped her and told her that painting the house before returning it to the landlord was not required in the UK, paid for damages caused by her dog (ripped a vinyl floor covering).

    We have enquiries from UK family tenants who are pet keepers if we will allow dogs/pets in houses. We tell them we do provided that tenants do not allow the pet to cause anti-social nuisance, they pay for any damage caused by the pet. At the end clear up all dog/cat feaces/mess from the garden, professionally de-flea the carpets. We do not hear from them again. Why?

    In your point 5 you raise a point about skills in lettings agency. I have not raised the topic of the skills of a letting agent or the comparative rewards of that trade/profession/employment. The blog post has not raised letting agents skills. However, you know that I work as a letting agent from posts on other topics. Therefore, it appears that you are trying to have a cheap personal attack on me. Your Rule 2: Be civil. No personal attacks. Keep on the topic?

    Your point 3. If the majority of tenants are not affected at all by the the proposals. A significant number of the tenancies of less than 3 years would be held by students, people working in temporary locations, new tenancies. Why legislate for a change that is not really needed?
  • commented 2014-05-12 05:19:39 +0100
    Christine.

    Do try to keep your comments concise or it makes the discussion harder for people to follow. I’ll try to lead by example.

    1. Guardian piece was interesting but contained no reasons why Labour’s reforms wouldn’t work here. Germany has permanent security of tenure, very different to 3 years.
    2. NLA position didn’t make any sense to us at all. It contained no evidenced facts.
    3. Point one of the RLA position means that the majority of landlords won’t be affected at all by the proposals.
    4. If private renting enjoyed the security, standards and costs of social renting you would indeed see people switching.
    5. Even with the “specialist” nature of student renting, it’s still hard to see where is the great skill in lettings agency. I would be interested to see how much money letting agents make and baseline it against other white collar jobs at a similar skill level.
  • commented 2014-05-12 00:11:23 +0100
    It is interesting to see an article in the Independent that headlined:
    “Labour’s rent reforms: will a European model really work in the UK?
    Ed Miliband looked to Germany for his rent reforms, but there are huge cultural differences to overcome before they can work.”
    It concluded:
    “Let’s welcome the interest in improving private rent, but concentrate on finding home grown ways to do so.”
    Full article http://www.theguardian.com/housing-network/2014/may/08/labour-rent-reforms-european-model-miliband-uk?CMP=new_1194#start-of-comments

    National Landlords Association response:
    “This does nothing to create a fair and balanced rented sector that works for landlords, tenants and agents. Frankly, I’m surprised that, after the effort Labour front-benchers put into consulting on how to make the private rented sector work better, Ed Milliband announces a change which risks putting landlords in a position of conflict with their tenants and leaves future housing provision on a knife-edge.” – See more at: http://www.landlords.org.uk/news-campaigns/news/poorly-thought-through-and-completely-unworkable-nla-responds-labours-private-re#sthash.DS9XzWDr.dpuf

    The Residential Landlords Association quoted
    1. The most recent English Housing Survey shows that the average length of tenancies under the current tenancy model is now 3.8 years with those staying on longer in their properties enjoying considerable savings on their rents.
    2. Government figures show 83 per cent of tenants in the private rented sector are satisfied with their properties compared to 81 per cent in the social sector.
    4. Just 9 per cent of tenancies in the private rented sector are ended by the landlord.
    5. Figures from the Office for National Statistics (ONS) show that rents in the private rented sector have been increasing by much less than inflation measured both by CPI and RPI. Over the last year they increased by just 1% alone in England.
    6. In July 2013, the cross party Communities (DCLG) and Local Government Select Committee observed in its report on the private rented sector that rent controls “would serve only to reduce investment in the sector at a time when it is most needed.”
    and concluded
    “The RLA will study Labour’s proposals carefully, but all the evidence clearly shows that rent controls of the kind being proposed, would critically undermine investment in new homes to rent and are not needed given that official statistics show that rents are increasing by much less than inflation.”
    Read full article at: http://news.rla.org.uk/labour-wrong-on-private-rented-sector/

    John Allen. By your figures 60% of £20 billion a year goes to social landlords who have a smaller proportion of satisfied tenants. From the information available it would suggest that either more tenants should switch to the PRS and the nation gets better satisfaction for money or that more tenants should be housed in the PRS so that there is overall more satisfaction in the rented sector (social and Private).

    Kevin Pheby. The student market is a specialist sector with even more regulation, demands, hard work and competition. Take lots of advice, do your due diligence. You have to be a player before you can win at the game. You can also loose, sometimes big time. It takes skill, hard work, persistence, money to succeed. And luck? I wish you success in creating win win situations for you and your future tenants.
  • commented 2014-05-10 17:52:17 +0100
    Kevin,

    A report this month from buy to let brokers Paragon showed that buy to let landlords have made an average return of 16.3% a year return on their capital investments for the part 18 years. This is the outcome return after all costs have been taken into account.

    That said, far from polarising against landlords, we’re trying to create a sustainable private rental market. The Labour proposals aren’t the solution to all the problems tenants currently face but they would certainly be progress. In fact, as you said, they reflect the normal behaviour of most landlords.

    The cause of the unsustainability of the private rental market as it is today is the house price bubble. 9 million or more tenants are fuelling this bubble because they have very little choice. We want to see 250,000-300,000 new homes built each year for as long as it takes to bring supply back into some sort of equilibrium with demand.

    If this were the case, a lot of people receiving top rate Housing Benefit for their private tenancies would instead find they are paying (and therefore claiming) less. Which is good news for the taxpayer.

    Putting that to one side, your approach sounds like the sort of attitude we’d want to see from all landlords. While we don’t agree with them on all things, we would recommend you take advantage of http://www.landlords.org.uk/ or http://www.rla.org.uk/ who have some excellent advice for new landlords. but do also look into the NUS report http://www.nus.org.uk/en/news/one-in-five-students-live-in-vermin-infested-homes/ that will show you some of the pitfalls.

    Good luck!

    Alex
  • commented 2014-05-10 17:05:31 +0100
    I am not a landlord but am thinking of entering the market, probably as a student let. Why? Because it is a good investment and I am not going to get much of a pension and in particular because students only want short term accommodation so it does not attract the opprobrium of people like John Allen. I am not a Labour supporter but think that the proposals are quite reasonable; what I would like to see equally, is a speedier and less costly way of removing problem tenants. The trouble is that tenants and landlords seem to have formed into two opposing camps; management and unions did this in the ‘70s and it served neither the shareholders or workers well, unlike the cooperation shown in Germany. I would therefore like to say this to John Allen:
    1 Why is it a rent rip off? Is a 5% return on capital so unreasonable when I have the risk of non-payment, legal costs, damages and renewals?
    2 Tesco and Primark receive money from people on benefit because of what they provide; why not landlords?
    3 With any luck your tax won’t have to support me in my old age.
  • commented 2014-05-02 09:18:47 +0100
    At last something is being proposed to tackle the rent rip off. More than £20 billion a year is paid on housing benefit, 40% of which goes to private landlords. Yes our tax goes to supplement the wealth of landlords.
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  • Generation Rent posted about Labour pledges to fix private renting on Generation Rent's Facebook page 2014-04-30 22:11:46 +0100
    Labour pledges to fix private renting