Ed Milliband Will Stop Tenants Being Ripped Off
Ed Milliband has said that if the Labour Part were elected he would immediately set about changing the law and reforming the rentals market. In a recent interview on the Andrew Marr show the Labour Party leader said that he would make big changes to the way charges are levied by letting agents and would also introduce rent controls across the UK. If rent controls were introduced by the Labour Party it would mean that rents would only increase each year inline with inflation. This would cut out the rapid rise in rents and would mean that tenants could plan ahead with their budgets knowing that their rent was unlikely to increase by 25% the following year.
Ed Milliband has already been attacked by Boris Johnson who said that this policy would have a disastrous effect on the housing market and would reduce the number of homes to rent because landlords would not be so keen to invest in the property market. Housing is a key battleground for all parties who are promising hundreds of thousands of new homes and various incentive schemes.
Clear difference in policies of major parties
However there is now a clear difference between the parties with the Labour Party promising to curb rental increases and reducing the fees that tenants are forced to pay by their letting agents. Letting agents fees are often very high with the tenants being charged for the rental agreement, inventory, charges for references, and other obscure charges that are not made clear from the outset.
Letting agents are making these charges because they can get away with it owing to the chronic shortage of homes to rent. If you are a tenant and complain about fees the agent will tell you that they have another tenant for the property. There simply are not enough homes to rent.
Millions are priced out of housing market
Millions of people are being priced out of the property market and all parties are keen to emphasise their willingness to help these people. Tenants are often stuck in short-term accommodation with high rents and the possibility of being evicted if they refuse to pay an increase in the rent. Ed Milliband has also said that the minimum term of a rental agreement must be increased from one year o three years so that tenants could lay down roots and make plans for their future.
At present many tenancies are ended after the initial one year period because the landlords wants to increase the rent and the tenant is unable to pay. If the Labour Party get voted in they will change the minimum term and ensure that rents only go up by the rate of inflation each year. If the Labour Party got it's way rents would not increase this year and would not be increasing by very much next year because inflation is currently 0%.
This would deter may landlords from investing in a buy to let but this may be a good thing because this would mean more homes would be available for first time buyers to purchase. Maybe this policy could have a positive impact on the property market and would start to reduce the demand for flats and small homes across Britain.