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Reactions to Labour’s private rented sector plans Matthew Warburton - 02/05/2014

Mr_Ed_MillibandLabour'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 year.

 

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 agents.

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