Rent control plans: Breaking down Labour’s latest housing proposals
Q What is Labour proposing for tenants and landlords?
A Labour leader Ed Miliband says his government would cap rents so they could not rise by more than the consumer price index (CPI) during secure, three-year tenancies.
Q Would all tenancies change to three years under the Labour proposal?
A Labour says that from 2017, the default legal contract would be three years, starting with a six-month probation period. After that, tenants would be able to terminate contracts with one month’s notice, and landlords could make tenants move out with two months’ notice “if they can have good reason.”
Q That doesn’t seem secure. What would be a “good reason”?
A A Labour party spokesperson told Morning Wire “good reasons” could include a tenant falling behind on their rent or exhibiting anti-social behaviour. But tenants could also be kicked out if a landlord wanted to refurbish, move into or sell their property.
Q What about tenants who don’t want to commit to a three-year contract?
A Labour says students and City workers from overseas would be able to request shorter-term tenancies, subject to the landlord’s agreement. But the party provides little detail of how the policy would be enforced to prevent landlords from forcing all tenants into shorter contracts.
Q Labour is calling this a rent cap. But could rents still rise under the proposal?
A Yes. The Labour plan protects tenants from rent outstripping inflation during a fixed-term contract. But it does not prevent landlords from raising rent at or under the rate of inflation. And, more significantly, it does not stop rent hikes above the rate of inflation at the outset of a contract—something nearly all housing experts agree would happen. As a result, it’s more accurate to call the proposal rent stabilisation instead of rent control.
Q So why is Labour doing this? What does the party stand to gain from the policy?
A With just over a week to go until the General Election, Miliband is trying to woo Britain’s 11m private renters, 35 per cent of whom are swing voters living in dozens of Labour target seats, according to a poll last year from the campaign group Generation Rent.
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