The rent control policy proposed by Ed Miliband has run into a spot of bother after an organisation, which was supposedly working alongside Labour on the plans, announced that they do not support the strategy.
Buy-to-let landlords would need to cap their rent rises, reminiscent of the 1970s limits, if the Labour Government were to come into power, says Mr. Miliband.
Labour would introduce new legislation that would make renting more affordable, and provide tenants with further protection from rogue landlords, added Miliband.
Straightaway, Labour was criticised for trying to pass similar rent controls that were accused of harming the property market in the 1960s and 70s.
In Miliband’s most recent bid, he says that landlords would be required to offer three-year tenancies.
Disapproval over Rent Control Plans
These longer-term agreements would provide greater security to families having to rent, and cap the amount that rents can increase annually.
Labour also revealed that the Royal Institute of Chartered Surveyors (RICS) are working alongside them to determine what the “appropriate benchmark might be.”1
RICS, however, has announced that they are “not developing proposals on rent benchmarks for the private rented sector.”
A spokesperson continues: “We do not recommend that a government introduce a ceiling on rent increases.”1
This statement may prove disconcerting for Mr. Miliband, who recently made a speech to broadcast the policy.
The Conservatives noted that Socialist governments within Venezuela, and Vietnam had attempted the proposal ineffectively. They also believe that the policy would create low quality rental housing, and less properties being rented out.
Mr. Miliband is again trying to interfere with certain markets, after he planned to control energy price increases, and the cost of train travel.
Nevertheless, rents have increased by 13% since 2010, resulting in many tenants complaining of difficulty.1
The Conservatives commented on the announcement by RICS, saying that the Labour party’s plans have “already begun to unravel.”1
The rent caps would also not “work in practice”, says shadow housing minister Emma Reynolds.1
A Labour source says: “This is not about rental controls. This is a rule to stop people being ripped off by rogue landlords.”1
Labour plan to compete in the 2015 general election by focusing on living standards, and has already blamed the Coalition Government for overlooking higher prices that have decreased lots of people’s spending power.
Regardless, their approach has been challenged in the last few months by progressive economic figures revealing the difficulty of many families is beginning to ease.
The First World War saw the modern day introduction of rental controls, which were upheld by governments of all parties. Margaret Thatcher eliminated the limits in 1988 under the Housing Act, in a bid to decrease state interference with the industry.
The Conservatives described the plans as trying to “introduce Venezuelan-style rent controls.”1