Tenants in the UK faced the highest rent increases on record last year, with private rents rising by 5% in the 12 months to May, according to the latest official figures.
Rent controls are a mechanism to limit the amount that landlords can charge tenants for rent, to keep the cost of living affordable and to try and prevent homelessness. The current stance in England is that the government opposes rent controls to set the level of rent, arguing they lead to declining standards and a lack of investment in the private rented sector.
The Labour party has been accused of staging a U-turn over rent controls after Lisa Nandy said the measures could leave people homeless. Despite previously stating that they would consider rent controls, Labour’s shadow housing minister Lisa Nandy has now confirmed that the party now opposes them.
Speaking at the Chartered Institute of Housing Conference, Nandy told delegates that the policy would be a “short-term fixing plaster” to solve the current housing crisis. Labour mayors including Sadiq Khan and Andy Burnham have called for rent freezes.
Nandy’s comments put her at odds with Labour’s London Mayor Sadiq Khan who has repeatedly said rent controls are the answer to the capital’s high rents. She explained that as the mortgage crisis deepens for homeowners and renters alike, it is inevitable that the debate has turned to short-term fixes.
The National Residential Landlords Association, welcomed Labour’s change of heart, adding that “rent controls would do nothing to address the rental supply crisis that tenants across the country now face.” He argued that what renters need is a proper plan to boost the supply of homes for private rent alongside all other tenures.
Building houses and increasing housing supply were key pledges in the Conservation Party’s manifesto. Competition amongst landlords increases when the supply of housing increases, which can help to drive down rents.
There are mechanisms for what seems like some backdoor rent control in the Renters Reform Bill. Rent increase clauses will be prohibited and landlords will need to increase rents through a section 13 Notice, which will have an increased notice period of 2 months.
A tenant is entitled to challenge the proposed new rent and refer the matter to the Tribunal. The Tribunal already has a delay dealing with rent increase disputes; therefore, it could be months before Tribunal deals with the matter. Although the tenant may have to pay the backdated rent from the date on the section 13 Notice, the Tribunal can also delay the increase of rent to the hearing date instead. This means that a landlord could be out of pocket and miss out on a good few months of the increased rent.
Unfortunately, some tenants may be unable to afford an increase in rent due to the cost-of-living crisis. We recommend keeping the lines of communication open with the tenant and exploring surrenders or payment plans as an alternative.