Miliband pledges action on private rent costs

Published on Thursday, 01 May 2014 09:43
Written by Govtoday staff

Ed Miliband MP will today launch Labour's local and European election campaign and unveil plans for sweeping reforms of the private rented housing sector which will help millions of households caught in the cost of living crisis.

Speaking at the campaign launch in Redbridge, Miliband will set out detailed plans for how the next government will tackle the root causes of the cost-of-living crisis to make hardworking Britain better off.

The measures will give families greater security with three-year tenancies and predictable rents which prevent excessive rises, as well as saving households up to £500 when they move into their homes.

Miliband will say: "One of the biggest causes of the cost of living crisis in our country is the price of renting or buying a home. People simply can't afford it, they're priced out, saving for a deposit year after year, decade after decade, or having to look for somewhere to live further and further away from where they go to work or where the kids have always gone to school.

"A Labour government will make sure that Britain builds 200,000 more homes a year by the end of the next Parliament so that more families can fulfil their dream of home ownership.

"But generation rent is a generation that has been ignored for too long. Nine million people are living in rented homes today, over a million families, and over two million children. That is why a Labour government will take action to deliver fairer deal for them too.

"Labour local authorities have already been taking the lead with a register of landlords to drive up standards. But we need to do more. If you buy your home, most estate agent will not charge you fees, but those who rent are given no protection and they get charged up to £500 just for signing a tenancy agreement. We will legislate to ban these charges by letting agents.

"And we need to deal with the terrible insecurity of Britain's private rental market as well. 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.

"So today I can announce, the next Labour government will legislate to make three year tenancies the standard in the British private rented sector to giving people who rent the certainty they need. These new longer-term tenancies will limit the amount that rents can rise by each year too - so landlords know what they can expect each year and tenants can't be surprised by rents that go through the roof.

"This is Labour's fair deal for rented housing in Britain: long-term tenancies and stable rents so that people can settle down, know where the kids will go to school, know their home will still be there for them tomorrow."

At the campaign launch, Miliband will underline that the cost of living crisis is the defining issue of our age which goes to the heart of how Britain is run - and who it is run for.

"In these elections and the general election next year, Britain faces a big choice. Not just a choice between candidates or parties, but an historic choice between two totally different visions of how a country succeeds, of how we can build a better future for the hardworking people of Britain, of who our country is run for.

"We've got a government utterly unaware of the true nature of the challenge Britain's families face. As the Tories try to go on a lap of honour about how well everything is going the reality for hardworking people here in Redbridge, and right across the country, is they are struggling to keep up - or are falling behind - trapped in a race to the bottom, stuck with wages that don't come close to covering their bills, caught in the crosshairs of a cost of living crisis the like of which we haven't seen before.

"This is because the vital link between the wealth of the country as a whole and your family finances has been broken. And that's why, here in Britain, it demands new answers, bold solutions, big changes to ensure that together, we can build a new economy and make hardworking Britain better off."

Miliband will explain how only One Nation Labour has real answers to the cost-of-living crisis and these elections provide a chance for the British people to vote for action to tackle it. "By voting Labour, you will be voting for action in Europe and locally to tackle that cost of living crisis now and for the future.

"You will be electing Labour MEPs whose priority isn't leaving, but changing the European Union so that it can work to raise living standards for hardworking families in Britain.

"We will work to reform Europe now, putting growth and jobs at the heart of the European Union, making sure the European budget is spent in a way that supports British business, and insisting that the EU helps clamp down on tax avoidance by the largest companies.

"And on May 22nd you will also be voting for Labour local councillors and Labour local authorities who will make the cost-of-living crisis their priority. Since I became Leader, I have been so proud of how Labour councils have been showing the way even in the toughest of times.

"From Luton to Cardiff to Glasgow, they've been changing their communities for the better: taking on the pay-day lenders, improving child-care, and promoting a living wage."

Policy Detail

Introduce long-term three-year tenancies:

Tenancies would start with a six month probation period at the end of which the landlord would be able to terminate the contract if tenant failed the probation (e.g. if there are rent arrears or anti-social behaviour). After the six months, the tenancy would automatically run for a further 2.5 years

Tenants would be able to terminate contracts after the first 6 months with one month notice as they can now.

But landlords would be able to terminate contracts with 2 months' notice only if they can have good reason:

  • The tenant falls into rent arrears, is guilty of anti-social behaviour or breaches their tenancy agreement
  • The landlord wants to sell the property, needs the property for their own or family use
  • The landlord plans to refurbish or change the use of the property.

Landlords would not be able to terminate tenancies simply to put rents up.

There would be a provision that allowed landlords to enter into shorter contracts where they are contractually obliged to do so as part of a buy to let mortgage entered into before the start of this new legislation.

There would also be provision for new tenants like students or business people on temporary contracts to request shorter-term tenancies subject to the landlord's agreement.

Predictable rents:

Landlords and tenants will set initial rents based on market value and conduct a rent review no more often than once a year.

Rents could still be reviewed upwards, downwards or stay the same, subject to market conditions.

But the legislation would place an upper ceiling on any rent increases to prevent excessive rises. This would be based on a benchmark such as average market rents. The Royal Institute of Chartered Surveyors is already examining what an appropriate benchmark might be.

Ban letting agents' fees for tenants:

Landlords would continue to pay charges just as people selling houses pay fees to estate agents. But letting agents would be banned from charging fees of up to £500 to tenants.

This will save people entering into a new tenancy an average of £350.

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