Election controversy of the week: Labour’s rent controls

Labour's plans to cap rent increases have been criticised by both renters and landlords alike.

150430-miliband

Ed Miliband: proposals are "riddled with loopholes"

Eleven million people living in private accommodation will have their rent rises capped at the rate of inflation under a Labour government, party leader Ed Miliband announced. Under the proposals, landlords will be required to offer three-year leases by default, with no increases allowed above the rate of increase in the consumer price index during the tenure.

There would be no cap on the level of rent set at the start of the tenancy, but landlords would have to disclose the rent levels paid by the previous tenants. Tenants would be able to terminate contracts with at least one month's notice, while landlords would be able to terminate with two months' notice if they have "good reason".

Reaction to the plans was mixed, even among those who campaign for greater rights for tenants. Housing charity Shelter called them "very welcome", but Generation Rent, a lobby group for renters, said the proposals were "riddled with loopholes".

They're right, said Martin Sandbu in the FT; this approach can do nothing to lower rents. "Landlords will respond by upping the rent at the outset of the lease." At best, it "will simply smooth rents over three years".

Landlords, property industry figures and most other major political parties claimed that controls would discourage investment in new houses. "This policy will backfire," said the head of the National Landlords Association, Richard Lambert. "Labour's good intentions could make the housing crisis worse, not better."

However, a YouGov poll found 60% of voters in favour of some form of rent controls, while 25% were opposed, suggesting the policy might still resonate with voters.

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