World Economy

Britain to Cap Rents

Britain to Cap RentsBritain to Cap Rents

Labor plans to bar private landlords from raising rents faster than inflation over a three-year period if it wins power after the general election.

Party leader Ed Miliband described Labor’s blueprint as “a plan for a stable, decent, prosperous private rental market where landlords and tenants can succeed together,” Sky News reported.

The move forms part of a plan to help the growing number of people – known as generation rent – who are stuck in rented accommodation as home ownership falls to its lowest level for 30 years.

Labor has already announced plans for secure three-year tenancies for all those who want them, to protect tenants in a short-term private market where default agreements currently last just six-12 months.

Now Miliband is promising that over the course of a three-year contract, rents would be capped so that they cannot rise by more than the CPI rate of inflation.

Labor is also offering to ban letting agent fees to tenants, which the party says would save the average renting household £625 ($949) over the next parliament.

Some 11 million people – including 1.5 million families with children – rent their homes. Almost 50% of private tenant households are aged over 35.

Labor claim average rents are £1,200 higher now than they were in 2010, and letting agents’ fees have added an average of £355 to the cost of renting a property.

Miliband said: “Too many people are struggling to meet the costs of putting a roof over their head. Some are saving for a deposit year after year, decade after decade, while the dream of owning their own home seems further and further away.

“Others are having to move all the time, ripping up the roots they have laid down at work or with friends, even having to change their kids’ schools.