Labour's plans for private rented sector reform,
announced yesterday, have drawn criticism from several directions,
but focused largely on the idea of a rent increase ceiling, just
one of the three main proposals.
The plan, announced in a
speech by Ed Miliband, proposes to ban letting agents from charging
tenants for issuing or renewing a tenancy, to make three year
tenancies the "standard" and to limit rent increases during the
term of the tenancy.
Three year tenancies would begin with a six-month probationary
period, after which the tenancy could be terminated for rent
arrears or anti-social behaviour, but otherwise it would run for a
further two and a half years. There would be protections for
landlords who needed to reoccupy the house or sell it. Rent
increases during the term of the tenancy would be linked to average
rent rises, or inflation, or a combination of the two.
There has been little disagreement with the proposal to increase
the normal period of an assured tenancy to three years (although
the permissible exceptions to this rule remain to be spelt out),
except for concern that mortgage lenders need to be consulted as
most currently stipulate that tenancies should be limited to one
But both the RICS and the British Property Federation have
raised concerns about the idea of limiting rent rises. The BPF said
institutional investors would be "feeling extremely nervous" about
the idea and the RICS was equally quick to say that "arbitrary
caps" on rents are "not a solution".
No-one, however, has rushed forward to defend lettings