If Labour wins power next week, it will legislate to abolish letting agent fees and introduce both longer tenancies and rent caps within the month.
The proposed legislation would form part of the Queen’s Speech on May 27.
Yesterday, Ed Miliband set out Labour’s policies for the private rented sector, while today he will say he will also cancel Stamp Duty Land Tax for first-time buyers purchasing at up to £300,000.
For the private rented sector, he would act immediately to curb “massive” rent hikes should Labour win the election.
He said he wanted to do more to stop the 4.5m households renting privately from being “ripped off” and that he wanted to help those “struggling to meet the costs of putting a roof over their head”.
Abolishing letting agent fees charged to tenants would save the average renting household £625, he said.
Three-year tenancies would become the norm, during which rents could not rise more than the CPI measure of inflation – currently 0% – although rents could be reduced.
Rent caps would not apply to those tenants who have agreed shorter tenancies, such as students.
New tenants would have the legal right to know what the previous tenant paid. Miliband said this would put them in a stronger negotiating position.
While three-year tenancy agreements would be standard, landlords would still have to give two months’ notice and have “good reason” to do so.
Miliband also said that landlords who do not adequately maintain properties will face losing tax relief – the so-called wear and tear allowance – which enables them to offset 10% of their annual rental income.
He said: “This is a plan for a stable, decent, prosperous private rental market where landlords and tenants can succeed together.”
Jeremy Blackburn, RICS head of policy, said Labour’s rent controls could undermine the Private Rented Sector.
But Matt Hutchinson, director of flatshare website SpareRoom, said the policy would be a vote winner. He said tenants would “welcome anything that keeps rents down. But with rents having risen faster than sales over recent years, the real damage has been done”.
He added: “Fixing rents for three years won’t be popular with landlords but it’ll get a thumbs-up from renters.”
Today, Miliband will say: “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the stamp duty. So we’re going to act so we can transform the opportunities for young working people in our country.
“For the first three years of the next Labour government, we will abolish stamp duty for all first time buyers of homes under £300,000.”
Comments (7)
Can i make it compulsory for all my staff to vote and specify which party????
Luckily they are not stupid so i dont have to! 🙂
Milliband and Labour just dont have a clue about running a business or a country. Remember the absolute mess they made of it last time? Nothing has changed – giveaways for all with no thought of the consequences.
amen to that….
Another aspect of longer fixed term tenancies is that landlord would become even more cautious.
Tenants on lower income or borderline circumstances could end being completely excluded: Why take any sort of risk at all?
Presumably Labour will move to outlaw the non-optional Stamp Duty fee on all homebuyers, not just the first time voters that they are trying to attract ?
“Fixing rents for three years won’t be popular with landlords but it’ll get a thumbs-up from renters.” Not where I am. Other way round, i.e. thumbs-down from renters. We shall see…
No mention Mr Milliband of the Labour ‘open door’ policy that for 15 years allowed all and sundry to enter the UK with precious few new homes being built. It’s called supply and demand Mr Milliband, essential to grasp in a so called free market economy!