Labour Promise To Slap Cap On Rising Rents

Labour 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 Labour's blueprint as "a plan for a stable, decent, prosperous private rental market where landlords and tenants can succeed together".

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.

Labour 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 Mr 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 (Other OTC: CPICQ - news) rate of inflation.

Labour is also offering to ban letting agent fees to tenants, which the party says would save the average renting household £625 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.

Labour 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.

Mr 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.

"Labour has a better plan. The security of three-year tenancies for all who want them with rents capped, so they can fall but not rise by more than inflation. The rights they need to negotiate a decent deal with landlords and stop rip-off letting fees. And the protection for taxpayers and tenants against bad landlords who are being subsidised for providing accommodation that fails to meet basic standards."

But Conservative housing minister Brandon Lewis said: "Ed Miliband is re-launching a policy that descended into chaos when it was first announced - the experts he claimed backed his plans came out and attacked it as unworkable.

"Rent controls never work - they force up rents and destroy investment in housing, leading to fewer homes to rent and poorer quality accommodation. Even Ed Miliband's own shadow housing minister admits they don't work. And an SNP-run Ed Miliband government will put our economy at risk, meaning fewer homes and higher rents."