Calls for letting's market to be regulated
There have been further calls today for the UK's letting's market to be regulated in the same way that the Financial Services Authority oversees the financial services industry. It is not only tenants that are calling for a big overhaul in the way the letting's market is run, politicians who see reforms as popular amongst voters are also joining the chorus for a regulate to take control of the way the private letting's market operates.
Many would like to see letting's agents become much more accountable and be more transparent with the way they change fees particularly to tenants. There have been some changes in the way tenant's deposits are now held but some experts believe that the government has only been tinkering around the edges and more needs to be done.
Agents to be made more accountable
As well as agents being made more accountable there are also calls for more severe penalties against landlords that do not carry out their obligations. The number of complaints against landlords and their agents is rising with many tenants complaining that fees being charged by agents are not transparent and not carrying out their duties.
On average tenants are being forced to spend £1700 when they rent a property, £300 of this is often demanded in what are called questionable fees from letting's agents. In many cases fees are not explained properly. These fees can be called admin costs, reservation fees, fees for drawing up tenancy agreements, fees for credit checks and fees for getting references from employers. Tenants are also charged fees for inventories when a home may not have furniture along with other spurious items.
Tenants often complain that they are treated with disdain by many letting's agents and that they are often brushed aside when questions are raised about fees. Some agents are reluctant to discuss fees and will often tell tenants that there is a strong demand for rental property and that they can quite easily find other tenants that will not raise questions over fees. Agents are obliged by law to show prospective tenants a tariff of their fees but because there is such a demand for rental property across the UK it seems as though this is often overlooked by agents particularly if they have several tenants looking to rent the same property.
Ed Milliband Wants To Introduce Rent Controls
It is clear that the state of the letting's market has not been lost on the Labour Party leader who has said that if his party were elected he would change the way the private letting's market operates. To start with he would introduce rent controls which would be a way of controlling the way rents can increase each year. He would seek to cap rent rises on an annual basis to the same level as inflation.
Ed Milliband strongly believes that families can not manage their budgets when the rent on their home increases by 10% percent each year. Currently there is nothing to stop a landlord increasing the rent by any amount each year. According to the Labour Party this is very disruptive not only to the budgets of families but is also disruptive for children's schooling and is also stopping families from making long term plans when they are unsure where they will be living. Ed Milliband wants to put a stop to this and knows that this would be very popular with most UK tenants.
Milliband has already said that this would be a priority and sees this policy as being wrapped up in the cost of living crisis that his party has been pushing. As well as rent caps he also wants to abolish fees that letting's agents can charge tenants. People are working harder and longer for less and more of their hard earned cash is being spent on rent.
The labour party has said that it wants to put an end to this and sees this as part of its election strategy. The number of tenants in the UK has doubled over the last 15 years and is currently just under three million households out of twenty two million. It looks as though this will continue and represents a massive shift in the way we live in Britain. UK homeownership is now at it's lowest level since records began and this trend looks set to continue. This according to many experts is why we need to regulated the lettings market and needs to be done sooner rather than later.
Ten Year Tenancies
Also on the list of priorities will be the length of tenancy agreements. Currently a tenant can can be asked to move out of their home after only six months if certain conditions were not met. According to experts this needs to be changed because many landlords will move tenants out if rents rise and the existing tenant wont pay. They can simply engineer a way of giving the tenant notice and move a new tenant in at the higher price. This is not uncommon and is something that needs to stamped out according to industry experts.
Of course tenants are able to challenge this in court but this is a costly exercise and many can not afford to go down this road. Instead of the minimum period Ed Miliband would like to see tenancy agreements drawn up for a much longer period of time. Tenancy agreements could be drawn up for five or ten years. This would give families the chance to put down roots and plan for the future. Children could have uninterrupted schooling and parents would be better able to plan for the future.
Shelter Housing Charity
Shelter, the housing charity has welcomed the proposals put forward by the Labour Party. According to Shelter the number of council homes being built is at an all time low and there is not much prospect in this changing in the short term. We currently need to build 250,000 new homes every year and this figure is not being met. Most of these properties are in the private sector and very little is affordable housing. Many of these new homes are being purchased by buy to let investors which is also contributing to the housing shortage. House prices are at higher levels that they were at the peak of 2007 and private rents are also being pushed up beyond the reach of many families.