Call for ‘fair rents’ system as prices rise in a ‘national phenomenon’

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Call for ‘fair rents’ system as prices rise in a ‘national phenomenon’

Private landlords face renewed pressure over rent controls after research found private rents are rising by between 6% and 9% a year in every region of England.

The New Economics Foundation (NEF) says rent rises are now a ‘national phenomenon’, with the lowest income private tenants spending 48.5% of their income on rent.

Its report calls for an ’emergency brake’ on rent increases, limiting rises to the lower of inflation or 2%.

The think tank is also calling for a phased return to a national ‘fair rents’ system, based on the model used for much of the 20th century before being abolished in the 1980s.

Under that approach, landlords would receive what the report describes as a fair rent, while tenants would be protected from excessive charges.

Reviving fair rents system

The organisation’s senior researcher, Molly Harris, said: “No matter who you are, living in an affordable, secure home is the foundation of a good life.

“But private renters are often pushed into overpriced and substandard homes.”

She added: “The Renters’ Rights Act is a valuable step forward in making private renting safer and fairer – but it doesn’t address the UK’s problem of runaway rents.

“Reviving a proven system that was in place for over 70 years, but redesigned for the 21st century, would make life more affordable for private renters across the whole country.”

Every region saw rents rise

Before the pandemic, NEF says annual rent rises ranged from around 1% in the North East to more than 3% in the east of England.

Since then, every region has recorded annual growth of between 6% and 9%, with the three fastest-growing markets all in north-west towns.

The report links worsening affordability to decades of housing policy, including the removal of rent controls, the sale of social homes through right to buy and the growth of buy to let mortgages.

NEF also argues that high rents affect the wider economy by transferring income from renters, who are more likely to spend, to landlords, who are more likely to save or reinvest in assets.

It says this suppresses consumer demand and directs billions of pounds in housing benefit to private landlords.

The proposed emergency brake would apply within and between tenancies until a fair rents system is established.

Declare local rent pressures

NEF also says mayoral combined authorities should be given powers to declare local rent pressure and run fair rent pilots, with rent levels linked to local indices rather than uncapped market rents.

The report proposes a gradual roll-out in areas with the steepest rent rises, to avoid rent crashes or sharp increases in tenancy churn.

New-build homes would be exempt from the emergency brake and fair rents system for a period, before being phased in later.

NEF says its proposals draw on rent regulation systems in France, Germany, Ireland and Spain.

The report also points to polling by Ipsos MORI in 2024 which found 71% of the public supported capping annual rent rises at no more than the national inflation rate, while 8% opposed the policy.

A separate YouGov survey for Common Wealth found 75% support for rent controls linked to property quality and location.

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Tenants could face homelessness without free legal advice – The Law Society

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Tenants could face homelessness without free legal advice – The Law Society

The Law Society has called for tenants to receive free legal advice and warned they could face homelessness.

The independent body claims 41% of the population in England and Wales do not have a housing legal aid provider in their area.

The Law Society says that with the Renters’ Rights Act now in force, tenants must have access to justice.

Must be free legal advice

Law Society of England and Wales president, Mark Evans, said: “All of us need a safe and stable home. If our government truly believes in acting for the common good, they must guarantee that all of us, no matter where we live or how much money we have, have what we need to access justice.

“The decision to end ‘no-fault’ evictions via the Renters’ Rights Act levels the playing field between tenants and landlords.

“However, for these rights to be real, there must be free legal advice for people where rogue landlords break the rules and do not comply with the new Act.”

Legal aid can make the difference between home and homelessness

Mr Evans adds: “Legal aid can make the difference between home and homelessness. Our research shows that despite growing demand for legal advice, the number of legal aid firms able to provide advice to families pushed from their homes has dwindled.

“Last year, the UK government pledged to increase the fees paid to housing legal aid firms. This was the first major rise since 1996, but it is still to be fully implemented.

“But this one-off investment will have limited long-term impact to reverse the effect of reduced funding by successive governments. Without a commitment to ensure the sustainability of these vital public services through regular investment, more local legal aid provision will be forced to shut down.”

The news comes as the government announced a £47 fee for tenants challenging a rent increase through the first-tier property tribunal.

As previously reported by Property118, under the Renters’ Rights Act, any rent increase upheld by the tribunal would take effect only from the date of its decision, rather than when the landlord first served notice. This means that even unsuccessful challenges could delay higher rent payments for months, leaving landlords in limbo.

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Landlords face immediate fines as councils shift enforcement approach

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Landlords face immediate fines as councils shift enforcement approach

A landlord expert has warned councils no longer need to warn landlords before they fine them.

Phil Turtle, director of Landlord Licensing & Defence, has warned that councils across the country are moving straight to formal enforcement.

Landlords could also face a financial penalty of up to £7,000 for minor breaches and £40,000 for the most serious offences.

Safety net has been removed

Under the Renters’ Rights Act, councils have stronger enforcement powers against landlords and the language councils are using is stark.

Mr Turtle explains: “Under the previous enforcement framework, some councils would typically issue a warning or advisory notice before escalating to formal action. That safety net has now been removed.

“Portsmouth City Council updated policy (typical of all councils now) states explicitly that ‘formal enforcement may now be taken more quickly, without a warning in some cases, especially where there are serious risks, clear legal breaches or repeat issues.’

“In plain terms: councils no longer need to warn you before they fine you.”

Brutal arithmetic of enforcement timeline

Under the act, landlords can face fines for breaching tenancy agreements, rent in advance and tenant discrimination.

Mr Turtle warns, multiple fines can be issued simultaneously where multiple breaches are identified, meaning a single inspection could result in combined penalties running into tens of thousands of pounds.

He explains: “What councils are not advertising is the brutal arithmetic of the enforcement timeline once a formal notice is issued.

“By the time a formal enforcement notice has been printed, processed, and delivered through the postal system, typically taking three to four days, and a landlord has actually opened and read it, the clock has often already been running for the better part of a week.

“The response window given to landlords is, in most cases, just 14 days from the date of the notice, meaning that in practice, landlords may find themselves with as few as six to seven working days to locate specialist legal support, brief a professional representative, gather evidence of compliance, and prepare a formal response.

“This is not a reasonable window for an uninformed landlord to navigate alone or to find and appoint a competent professional representative.”

Penalties can reach £40,000

Mr Turtle adds: “What we are seeing is a seismic shift in how councils are empowered, and now obligated, to enforce housing law.

“The Renters’ Rights Act has removed the last remnants of the traditional buffer of informal warnings.

“Councils are no longer being asked to educate first and enforce second. They are being told to enforce and enforce hard.

“The cruellest element of this new landscape is the timeline. A landlord receives a formal notice through the post. By the time they’ve actually read it, they may have less than a week of working days to act.

“That is simply not enough time for someone without specialist knowledge to mount an effective response, particularly when the penalties at stake can reach multiple £40,000s.”

Mr Turtle is now urging all landlords to take action by understanding their obligations and keeping meticulous records to show evidence of compliance.

Landlords can book a no-charge, no-commitment 10-minute diagnostic call with an expert from Landlord Licensing & Defence on HMO and selective licencing or other compliance matters by clicking here or by calling 0208 088 8393.

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