Labour are pitching for votes from the “generation rent” voters by promising changes to the rental market if they are elected, although campaigners have said the plans don’t go far enough.
Party leader Ed Miliband announced that private landlords would be banned from increasing rent above the inflation rate over a three year period, before adding that landlords and letting agents would be also be required to state the rent paid by the previous tenants.
Miliband says this will allow renters to negotiate the best possible deal at the start of their contract and said if properties do not meet basic standards rogue landlords will lose their buy-to-let tax relief.
However activists at Generation Rent said that Labour’s plans were “riddled with loopholes” and they don’t go far enough. The group’s director Alex Hilton said bad landlords should be banned and tax on rental income should be increased to 22%.
This comes after Labour has already announced plans for secure three-year tenancies for all those who want them, in order to protect tenants in a short-term private market where default agreements currently last between six months and a year.
Opposers to Labour’s promise though point out a number of flaws. Swedish economist Assar Lindbeck says if landlords cannot make enough money, because of rent controls, they will not invest in property which then falls into disrepair.
The Adam Smith think tank added: “They incentivise landlords to price in expected rent rises at the beginning of the tenancy, so if rents fail to rise as quickly as expected, the tenant is left paying more than they would need to.”.
In September 2014 figures released by the Office for National Statistics said in 2011-12, 4.9 million homes were privately rented accommodation, 2.7 million were in housing association control and 2.1 million were owned by the local authority. There were 17.7 million owner-occupied properties.
The figure of 4.9 million homes being privately rented is nearly double the figure from a decade previous. With the rental market on the rise therefore, getting the “generation rent” voters onside would represent a success for Miliband and Labour in the run up to the May 7th.