I have published this video this morning. In it, I argue that millions of people living in private rented accommodation are still facing well over inflation-rate rent increases when increases in wages are falling dramatically as most inflation does as well. This penalises those living in that accommodation in a grossly unfair way. Labour could cap rent rises so they must be less than the rate of inflation to control this. It's time it did.
The audio version of this video is here:
The transcript is:
Labour likes to claim there is no money left, and therefore, its scope for action, now it's in government, is very restricted.
I don't agree. I am producing a whole series of videos explaining how Labour could change the well-being of millions of people in the UK simply by changing the laws that govern us in ways that will impose very little cost on it, but which will deliver major benefit for the UK.
Let me provide another example. There are very large numbers of people in the UK, most especially younger people, who live in rented accommodation. And the rents on that accommodation have risen dramatically in recent years, largely as a result of the increase in interest rates imposed on this country by the Bank of England.
At present, rents are rising by an average of at least 7 per cent a year, but we know that inflation is heading back to between 2 and 3 per cent, and wage increases are therefore going to fall back to that sort of level as well in due course.
That means rents as a proportion of the net income after tax of very many people in the UK are going to rise at rates that they will find very difficult to pay because those who live in rented accommodation tend to be amongst the lower paid.
This is deeply unfair. Labour could do something about this. It could set a cap on rent increases. An annual rate of increase that was less than the current rate of inflation would be what is required. And if at the same time, and this will be the subject of another video, Labour stopped no fault evictions of those who are in private rented accommodation, then it would not be possible for landlords to evict people so easily to get round this regulation in that way.
We need to protect people who live in rented accommodation. It is unfair that they are bearing the brunt of the anti-inflation policy of the Bank of England to no real effect at all with regard to the rate of inflation that we're actually suffering, enjoying, or whichever way you look at it. The fact is, Labour should be stopping these penal rent rises.
Come on Labour, it's within your power to make this change for large numbers of people in the UK. Please do it now.
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Would this require primary legislation? With 38 bills announced in the King’s Speech, this session of Parliament is already the most crowded in recent times. I can’t see any hope of doing much extra, so perhaps we have to accept that anything more will have to wait until next year?
I am setting out possibilities. Five years are available.
I suggest that abolishing S21 evictions has to come first.
I would also suggest that making landlords liable for Local Authority costs for illegal evictions and unfit properties might raise Governments game a bit.
Labour should be doing the things they promised in their manifesto, not random things that have never been discussed with the electorate nor which would be approved by the wider population. It would be undemocratic.
You do know that 98% of what any government does is not in its manifesto, don’t you?
It is appropriate to prioritise manifesto commitments in the early part of this Parliament; there will come a time when there is scope for new initiatives, which is when pressure will bear fruit.
How many peoplem read the mmanifesto?
2?
Do landlords ever decrease the rent, I wonder, when their mortgage payments reduce? I think I know the answer.
I think you do
An article covering the discussion and referring to many studies showing rent caps do not work.
https://www.economicsobservatory.com/does-rent-control-work
By those who do not want them to work…and whose opening assumpion is that they do not
Another way is to build more social housing. At the moment there is very little available which means that private landlords have no competition other than with each other. I used to own two one bed flats which I let out for £625 a month in 2014, but the estate agent tells me that they are now getting £900 for them and there’s no shortage of applicants.
And do away with Housing Associations, too, which are able to jack up “rents” by charging what they like for service charges. A local one which I have investigated is supposed to be non-profit making but its accounts show large annual “Operating Surlpuses” and meanwhile the CEO takes home a quarter of a million pounds a year. I don’t suppose a local authority Housing Officer would get anything like that.
Thge alternative is for the state to buy housing at kncok down prices after capping rents
I’m not sure I agree with that. Tht buys into the perception that all landlords are very rich people who make a killing out of extracting large amounts of rent from their tenants. But a lot are very ordinary middle-earners who are simply using property as a way of investing money they have saved or inherited. I’ve certainly never regarded myself as rich, and used an inheritance for what, I hoped was wisely, by putting it into property rather than the Stock Exchange. So forcing people like me to sell up at what might well be a loss is not good IMO.
Hang on – I am saying capping increases at infaltion
How does that force sales at a loss?
The state should deliberately cause a fall in prices and then capture assets cheaply?
And you call others facist!
But you’re entirely happy to take all the upsides of the massive state subsidiy for rents in universal crdit without expecting questions to be asked or control to be sought?
Politely, stop being stupid