(London) A Labour government would cap private sector rent rises and abolish letting fees for tenants, Ed Miliband will promise.
The Opposition leader is setting out a package of housing reforms, including legislating to make three-year tenancies the norm.
With his party facing the prospect of finishing behind Ukip in the European elections, Mr Miliband is making the policy the centrepiece of his campaign launch.
He will call housing costs “one of the biggest causes of the cost of living crisis” and warn many face “terrible insecurity” at the hands of unscrupulous landlords.
The changes were welcomed by anti-homelessness campaigners as a vital protection at a time of a serious housing shortage.
But the Tories dismissed them as a trade union-inspired “gimmick” that in other countries had ultimately resulted in higher rents.
Under proposals designed to prevent rogue landlords forcing people out by hiking rents, property owners would be forced by law to keep rises below a set level.
Labour said the Royal Institution of Chartered Surveyors was seeking an “appropriate benchmark” such as average market rents in an area or inflation.
Letting fees – which the party said now cost tenants an average £350 – would be abolished.
And people would be guaranteed a three-year tenancy as long as they paid the rent on time and were not guilty of anti-social behaviour during the first six months.
Landlords could only serve them with two months’ notice to leave with “good reason” such as rent arrears, anti-social behaviour or breaches of the tenancy agreement or because they needed the property to live in or to refurbish.
On a visit to Redbridge, north-east London, Mr Miliband will declare that “Generation Rent…has been ignored for too long”.
“Nine million people are living in rented homes today, over a million families, and over two million children. That is why a Labour government will take action to deliver fairer deal for them,” he will say at the launch of Labour’s campaign for the Ma 22 Euro and local polls.
“We need to deal with the terrible insecurity of Britain’s private rental market.
“Many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice with no reason.
“Some are told to accept huge rent rises or face eviction. It breeds instability and that is bad for tenants, bad for families, bad for landlords, and bad for our society.
“The next Labour government will legislate to make three-year tenancies the standard in the British private rented sector.
“These new longer-term tenancies will limit the amount that rents can rise by each year too – so landlords know what they can expect each year and tenants can’t be surprised by rents that go through the roof.
“This is Labour’s fair deal for rented housing in Britain: long-term tenancies and stable rents so that people can settle down, know where the kids will go to school, know their home will still be there for them tomorrow.”
Conservative Party chairman Grant Shapps said: “Evidence from Britain and around the world conclusively demonstrates that rent controls lead to poorer quality accommodation, fewer homes being rented and ultimately higher rents – hurting those most in need.
“And it’s yet another Labour policy bought by Ed Miliband’s union boss, Len McCluskey.
“The only way to raise people’s living standards is to grow the economy, cut people’s taxes and create more jobs. We have a long-term economic plan to do that, Ed Miliband doesn’t.”
Labour dismissed the comparison with rent controls and said a similar policy had already proved effective in Ireland over the past decade.
Campbell Robb, chief executive of homeless charity Shelter, said: “Renting used to be a stepping stone for students and young professionals, but today one in every five families in this country rents their home from a private landlord.
“No parent should be bringing up children in a broken rental market where six-month contracts, sudden rent rises, and huge lettings fees are the norm.
“With housing now regularly polling as a top five issue, voters want to see a convincing offer from all parties that genuinely promises to bring a decent home back within their reach.”
But Chris Walker, head of housing and planning at the right-leaning think tank Policy Exchange, said: “Capping rents could potentially lead to landlords simply withdrawing from the market if they don’t get the price they need to make their investment economically sound.
“This could subsequently create shortages in the market.”
Next month’s polls and the 2015 election represent an “historic choice between two totally different visions of how a country succeeds, of how we can build a better future for the hard-working people of Britain, of who our country is run for”, Mr Miliband will declare.
“We’ve got a Government utterly unaware of the true nature of the challenge Britain’s families face.
“As the Tories try to go on a lap of honour about how well everything is going the reality for hard-working people here in Redbridge, and right across the country, is they are struggling to keep up – or are falling behind – trapped in a race to the bottom, stuck with wages that don’t come close to covering their bills, caught in the crosshairs of a cost of living crisis the like of which we haven’t seen before.”
Pressure on Labour to commit to holding a referendum on the UK’s continued membership of the EU is certain to intensify if Ukip’s poll leads translate into the party topping the national vote.
Mr Miliband will say: “We will work to reform Europe now, putting growth and jobs at the heart of the European Union, making sure the European Budget is spent in a way that supports British business, and insisting that the EU helps clamp down on tax avoidance by the largest companies.”