In a speech at the Labour Party Conference this month in Liverpool, the Shadow Housing Secretary, John Healey MP, called for a variety of reforms in the private rented sector. These would include the introduction of rental controls, the founding of renter’s unions and the abandonment of Section 21 notices.
The aim of these plans is to pass power into the hands of the tenant, according to Labour, via the creation of a fund, totalling £20m, to establish and support the growth of renters unions.
Renters unions will:
– Provide information and practical support, including the accompaniment of experienced representatives with tenants to meet with landlords
– Coordinate national campaigns on better living conditions and fairer systems for tenants, as well as giving renters a more powerful national voice.
Bolstering the existing calls for rent controls made by Jeremy Corbyn and Scottish Labour, John Healey is now urging for cities to be given the power to begin rent controls. However, the policy has already been deemed not viable economically, and could, in some cases, increase rents.
In 2014, a report by the European Commission discovered that the consequences of rental controls would impact housing market stability, with negative effects on worker mobility, and it advised against their introduction. The European Commission stated that social concerns, including the prevention of homelessness and the supply of affordable housing for low-income and young households, required more welfare-enhancing policies, rather than policies which take a toll on the efficiency of the rental market.
The system in Germany is frequently highlighted as an example to emulate. However, it has not proved the success story it promised to be. The IPPR (Institute for Public Policy Research) concluded that while the median rent for new tenancies fell in the months following the introduction of the rent brake, rents quickly climbed to the level in previous periods, and then exceeded it.
However, contrary to the statistics, in one city in the study, Munich, rent prices at the lower end of the market fell.
Labour also called for further radical changes, including:
– The removal of Section 21
– Introduction of three-year tenancies
– Introduction of new legal standards which will ensure rental homes are fit for human habitation
– The prohibition of letting agent fees
Landlord organisations have welcomed Labour’s plans for the introduction of unions for renters, as networks which inform and support tenants with useful and consistent advice will promote good practices within the sector and help tenants understand their rights.
Ensure you are being transparent and fair – start using a property inspection app today to produce professional inventories, check-ins, check outs, interim inspections, building inspections, risk assessments and more with InventoryBase.
Start your free trial here today.
Image credit: Shutterstock