Stop landlord rip-offs:control rents!

Submitted by Matthew on 3 December, 2014 - 10:54 Author: Colin Foster

The tenants’ campaign on the New Era estate in Hoxton, east London, has spotlighted the rise of a fight back by private tenants.

“When our estate was bought by new owners”, say the New Era tenants, “we were given rent rises of 10% and told to expect greater rises next year, as the new owners wanted rents to be at ‘market levels’. In Hoxton... this means over £500 a week”.

Current rents are about £160 a week, so most tenants face being forced out of their homes.

Three trends have come together.

Firstly: between 2008-9 and 2012-3, households privately renting increased from 14% to 18% of the total, and outstripped social renting.

The number of owner occupiers, after soaring in the Thatcher era, has decreased since 2008. Social housing has been cut back by government-imposed “right to buy” for tenants and by an almost total block on councils building new dwellings.

Secondly: most private tenants now have an “assured shorthold tenancy”. This means that they have little security, and little legal redress against high rents.

Theoretically tenants can appeal to a tribunal for rent disputes during the first six months of their tenancy. But the tribunal looks only at whether the rent is well above other market rents in the area, not at whether it is reasonable or affordable.

In the late 1950s, tenants agitated against “Rachmanism”, so called after the notorious landlord Peter Rachman. In 1965, they won a Rent Act which gave some security of tenure and “fair rents” set so as to disallow rent rises based solely on the market.

The 1965 law was undone by Housing Acts of the Thatcher government in 1980 and 1988. The impact then was limited, since relatively few people rented privately. Now they have their full impact.

Thirdly: since October 2011, the government has limited the Local Housing Allowance (LHA), the maximum rent level which can be covered by housing benefit, to a level calculated so that 70% of rents in the area are higher and 30% lower. Since April 2013, not even that 30% level has been allowed. LHAs will increase only in line with the Consumer Price Index.

According to government figures, rents have been rising, but only modestly — by 8.5%, on average, between January 2005 and May 2013. But rents for new private tenancies have risen much faster than that.

In the three months to October 2014, average rents for new tenancies were 7.8% higher than the same period last year (£906 per month compared to £840). The average rent for new tenancies in London was £1,411; this when real wages have been squeezed longer and more than ever previously recorded.

Tenants’ woes are increased by big charges made by letting agents, and by some agents refusing to deal with tenants on housing benefit.

Social housing should be re-expanded by authorising councils to take over empty or underused properties, and to build new dwellings.

In the meantime, the London Renters’ campaign, an alliance of private tenants’ groups in several areas, demands:

• Action to bring down rents and keep them under control

• Longer secure tenancies

• An end to fees, and proper regulation of letting agents

• No discrimination against housing benefit claimants (bit.ly/p-rents).

The writer Danny Dorling repeats the call for rent controls, and also proposes:

• Extend the current council tax bands up to band “Z” with a view to transforming the tax into a fairer national land and property tax

• Second homes, holiday homes and empty commercial property to be included into a fairer property tax system

• Squatting and other acts done to seek shelter should again be a civil, not a criminal offence.

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