Labour’s proposed rent controls will ultimately lead to “huge rent hikes” every three years, says the Liberal Democrats.
Today, Labour said it would introduce as standard three-year tenancies with rent rises capped at inflation.
It said rents should rise by no more than the CPI measure of inflation – currently 0 per cent – and tenants should have a legal right to know what the previous tenant paid.
But for the second time today, Labour’s policies have come in for criticism. Earlier, Capital Economics suggested its proposal to offer a stamp duty holiday for first-time buyers purchasing homes worth less than £300,000 would actually leave FTBs worse off.
The LibDems argue Labour’s rent control plan is “ill thought through and will make things worse for tenants”.
Campaign spokesman Lord Paddick says: “Rather than reduce rents, Labour’s plans will lead to huge rent hikes every three years, higher rents overall and fewer available rental properties.
“Labour consistently failed to support house building in government and their inaction left millions struggling to pay their rent.
“Instead of announcing unworkable, populist policy, Labour should be straight with the public about the fact that they will simply not build the homes we desperately need.”
Separately, 72 per cent of letting agents believe the cap on rents and three-year tenancy proposals will see landlords pull out of the market, according to the Association of Residential Letting Agents.
ARLA managing director David Cox says: “A vast majority of ARLA letting agents are worried that Labour’s proposed three-year tenancies with strict caps on rents will only cause the gap between supply and demand to widen.
“Flexible tenancies are what makes the sector work. If this changes, some landlords will be forced to exit the market and tenants are likely to automatically incur rent hikes and feel driven to stay in agreements for longer before getting on the housing ladder, thus not freeing up rental properties for other tenants.”