The Labour Party has launched its campaign for the local and European elections (to be held in 20 days’ time)… With proposals for national legislation. Setting aside the implicit dropping of even the pretense that local elections should be about local issues, it marks the first recognition of the millions of homerenters who have had such a raw deal since the deregulation of 1988 and the post-2000 housing cost explosion.
Ed Miliband is proposing that the standard 12-month contract that exists in the private rented sector (PRS) be replaced with a 36-month one, in which rents may only be increased annually and subject to a cap based on the average rent change. Given that about 75% of rented houses that would make up that average would be capped according to said average, there is the risk of distortion. Anyhow, these caps and longer contracts would be complemented by a ban on letting agents’ fees, eliminating the £500 fee tenants usually have to pay for the privilege of being ripped off.
Although these proposals do not constitute the full state intervention and rent caps which are required in the housing market, they are the first big improvements in the PRS seen in generations. The needs of Britain’s nine million renters are finally getting the political attention they deserve. This has terrified interests which have made a fortune from the rip-off rentals sector: letting agents, landlords’ associations and the Conservative Party have accused Labour of planning to wreck the housing market, of economic illiteracy and of perusing “Venezuelan” socialism. Of course, One Nation Labour’s brand of neoliberalism-tainted socialism is not even in the same postcode as the “Bolivarian” or “21st century” ideology of Hugo Chavez and Co.
But the tiny elite of landlords, banksters and Tories should be wary of moderate reforms which slow their accumulation of obscene unearned wealth. If public anger with their perpetual exploitation grows, they’re going to want more than controlled rises on already expensive rents, for example.
Although the transformation of the PRS is still a long way off: proper security of tenure; Living Rents; restricting buy-to-let; eliminating amateur landlords; and non-profit market leaders are all absent from Labour’s reforms, we’re still lightyears ahead of the total ignoring of the PRS of which the political class is guilty.
This is a great start.
