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1 May 2014updated 09 Jun 2021 9:14am

Labour will get Britain building to tackle high rents

The lack of supply is the principal cause of unaffordable rents and house prices. 

By Hilary Benn

Today Ed Miliband announced that a Labour government would legislate to make three year long-term tenancies with predictable rents the norm and ban letting fees being charged to tenants, as part of our plan to deal with the cost of living crisis.

Nine million people now rent privately in England. And it’s not just young people: 1.3 million families also live in privately rented housing, and for far too many of them that means a great deal of insecurity. They have to live with the uncertainty that their rents could jump up from one year to the next and that they won’t be able to stay in their home. 

Labour will make three year tenancies the norm. If a tenant wants a shorter tenancy, they will of course be able to get one, but the default will be that they can have three years as of right.  As long as they pay their rent, don’t commit anti-social behaviour or crime, or damage the property, they should have the stability to make their flat or house a home in the local community. Of course if a landlord needs to move back in or sell the property, they’ll have the ability to do so. But the default will be clear. This is also good for landlords because what they want are good tenants paying the rent every month of the year, rather than tenants moving in and out which means there are times they are getting no rent at all.

On rents, we’re suggesting that they be set initially, just as happens now, between the landlord and the tenant in line with the market and after negotiation. But once that rent is set, landlords should not be able to put it up unfairly or disproportionately during the term of the three year tenancy. At present, tenants can face unpredictable and costly rent hikes if they want to renew each year. So we will legislate to set a ceiling on any increase; what this ceiling will be will be decided on the basis of consultation with tenants, policy experts and, of course, landlords.

On lettings agents, we will ban charges being levied on tenants, rather like what happens with estate agents, where it is the vendor who pays all the agent’s fees and charges and not the buyer. Some lettings agent charges can be disproportionately high and can involve both the landlord and the tenant being charged for the same thing; for example charging both landlord and tenant £100 just for a credit reference check. We will put an end to this.

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But we don’t just want to deal with the private rented sector’s problems to offer more security and stability. We all know that the lack of homes being built is the principal cause of high rents and high house prices. And that’s why Ed Miliband has pledged to get Britain building. We want to be building 200,000 homes a year by the end of the next Parliament. The Tories have presided over the lowest level of housebuilding in peacetime since the 1920s and ours is an ambitious target. So we’ve pledged to work with communities and local authorities to unlock land and consent to build a new generation of homes, including new towns and garden cities.

I believe that in the same way that so many young renters, their parents and families locked out of owning their own home have reacted positively to Ed’s announcement today, communities around the country do see that we need to build more homes. Otherwise we will condemn Generation Rent to insecurity and the possibility of never having a home of their own.

In this way, we can help people who either want to rent, or are having to rent, to enjoy the peace of mind that they can be part of their community, put down roots, send their children to school, keep their local job and not have to pick up their belongings and lives and move. Peace of mind that they can plan their finances and not have to worry that they might be out of their home if the rent suddenly jumps up. And peace of mind that a Labour government will work hard to ensure they get the chance to buy a place of their own.