By Wolfgang Moneypenny/Â @MoneypennyHomes
For the past year or so it has felt like housing politics has entered the Zeitgeist, perhaps another steroidal effect of George Osborne’s potentially reckless Help To Build stimulus. There has been a growth in dialogue and activism. And now the Labour Party enters the conversation by beginning to release details of planned reform of the current incredibly unregulated rental market. With Grant Shapps hysterically screeching aboutÂ “Venezuelan-style rent controls” you’d be forgiven for assuming Ed Miliband has made a brave darting run into radical territory.
Alas not. Most concretely, a number of news sources refer to a welcome extension of the minimum tenancy to three years. Whilst still far from ideal for anyone with pretentions of settling into a home (treating it like, er, a home!), I do believe this is a noteworthy improvement. Indeed, as Tom Gann of Southwark TenantsÂ noted on Twitter, this is in fact stronger than some of the more timid renters rights groups have called for.
Also widely reported is that there will be some form of a price control mechanism, linked to either inflation of average rent increases, or a combination.Â LabourListÂ
Be it inflation or average rent increases, wages have fallen behind since the financial crisis (or even before). Since the beginning of 2008 average UK rents have gone up 15%, while wages have only grown by 10%. If these are indeed rent controls, they are controls upwards.Â Labour’s proposal begins to sound like a managed real-terms incline of rents. A trimming of the very worst extremes (the moribund monotony of annual moves and horror of “oh my days!!” 50% rises) whilst structuring in steady wage and growth busting returns to the housing rentier (a class of exploiter who, lest we forget, includesÂ over 200 members of parliament).
And finally, for a giggle, and unlike Shapps, let’s actually have a quick look at some of Venezuela’s “New Labour-style rent controls” and other forms of housing market regulation. BackÂ in November 2011, the late President Hugo ChÃ¡vez introduced a law that was basically a Right To Buy… from your private landlord, at a state-regulated price. A year laterÂ in November 2012Â it was announced that tenant movement activists would help authorities inspect properties and set rent levels as part of the implementation of rent controls in the country.
Labour officials are already putting out soundings that their policy will be one of letting the market set prices. Moreâ€™s the pity. I suppose I should, in the name of openness, offer up this declaration of self-interest: my partner and I narrowly escaped a fire in our death trap of a new flat a few nights ago. We moved to this flat because it was perhaps 15% cheaper than local market rate. You get what you pay for, I guess. Labourâ€™s policy looks set to do far too little to challenge that mechanism, regardless of what party political bleating we may hear from the Tories.
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