LONDON, May 14, 2014 /PRNewswire/ --
Unless Parliament states otherwise, the next General Election will be on 7th May 2015, and already political parties are unveiling their manifestos. One of the biggest talking points between political parties has been the cost of living and the UK private rental market. In Labour's campaign launch, Ed Miliband promised a cap on rent increases, longer default tenancies and a ban on up front tenant fees in what is being termed his 'Rent Reforms'.
The Labour party leader, Ed Miliband, recently stated that the price of renting a home is "one of the biggest causes of the cost of living crisis in our country", as the cost of living in the UK is rising faster than anywhere else in Europe. This is ultimately leading to many families struggling to afford their rent as well as their necessary outgoings such as electricity and heating bills.
The rent reforms proposal includes three year tenancies, a cap on rent increases and axing agency fees. However, the Conservatives claim that "The only way to raise peoples' living standards is to grow the economy, cut peoples' taxes and create more jobs." The Conservatives also claim that evidence from other countries suggests that rent controls lead to "poorer quality accommodation, fewer homes being rented and ultimately higher rents".
However, longer default tenancies can be positive for both tenants and landlords who are looking for long-term deals. The main issue is that each case is different, meaning that if a tenancy doesn't work out a landlord may be stuck with a difficult tenant for up to 3 years. Mark Hare, PropertyQuoteDirect's Managing Director, says: "Many Landlords rent out their properties while they live somewhere else for work purposes, but if these changes go ahead they will have to think twice about committing for 3 years. Landlords may also be put off buying further properties, which will mean more empty homes."
Many tenants will welcome the plans for rent caps, however the Residential Landlord Association (RLA) has opposed the plans, saying: "Rent controls of the kind being proposed, would critically undermine investment in new homes to rent and are not needed given that official statistics show that rents are increasing by much less than inflation". Mark adds: "Landlords may be reluctant to invest in their properties with rent being capped. They may also be more incentivised to move tenants on after three years to increase the rent, when in the past they would usually keep on good tenants on for longer."
Under the plans, letting agencies would be banned from charging tenant fees and will instead have to ask landlords for fees. Mark states that, "Agents will be more likely to ask landlords for the fees, which will also put pressure on rents.
"It's understandable why many people in the industry aren't happy about the rent reforms. It was always going to be difficult to create a system which benefits both landlords and tenants, however it would be positive if there was a balanced approach to the long term challenges of the housing crisis and the cost of living."
PropertyQuoteDirect was founded in 1965 and is part of the Bedford Insurance Group. They have been providing quality insurance policies for over 40 years.
- Real Estate
- Ed Miliband