Advertisement

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.

Advertisement - Article continues below

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.

Advertisement
Advertisement

Recommended

Visit/investments/property/601411/can-the-uk-housing-market-escape-a-slump
Property

Can the UK housing market escape a slump?

The Bank of England is predicting a 16% slump in house prices.
29 May 2020
Visit/505721/the-death-of-buy-to-let-property-is-a-useful-cautionary-tale-for-all-investors
Buy to let

The death of buy-to-let property is a useful cautionary tale for all investors

Investing in buy-to-let property was once a perfectly valid thing to do. But the government killed the market. John Stepek explains what investors sho…
29 May 2020
Visit/investments/property/601338/the-uk-housing-market-is-open-for-business-again-what-happens-now
Property

The English housing market is open for business again – what happens now?

With the property market re-opening, we can now view, buy and sell houses again. But what next for house prices? John Stepek looks at what the last tw…
14 May 2020
Visit/investments/funds/investment-trusts/601232/choose-carefully-when-buying-real-estate-investment
Investment trusts

Choose carefully when buying real estate investment trusts

Some real estate investment trusts (Reits) are on hefty discounts to net asset value, but not all are bargains, says Max King.
7 May 2020

Most Popular

Visit/economy/uk-economy/601427/covid-bounce-back-loans-and-inflation
UK Economy

What bounce back loans can tell us about how we’ll pay for all this

The government will guarantee emergency "bounce back loans" for small businesses hit by Covid-19. Inevitably, many businesses will default. And there'…
1 Jun 2020
Visit/investments/commodities/601433/commodities-possibly-the-biggest-opportunity-in-todays-markets
Commodities

This looks like the biggest opportunity in today’s markets

With low interest rates and constant money-printing, most assets have become expensive. But one major asset class hasn’t. John Stepek explains why com…
2 Jun 2020
Visit/investments/commodities/gold/601444/these-seven-charts-show-exactly-why-you-must-own-gold-today
Gold

These seven charts show exactly why you must own gold today

Covid-19 is accelerating many trends that were already in existence. The rising gold price is one such trend. These seven charts, says Dominic Frisby,…
3 Jun 2020