Diane Abbott MP: The Government is deepening the crisis in private rented sector

'A quarter of Tory MPs are landlords and a fifth of all Tory Party donations are made by property companies.'


Diane Abbott is the Labour MP for Hackney North and Stoke Newington

The private rented sector is in crisis. Far from tackling it, this government is intent on making it much worse – at the expense first of renters and even decent landlords.

The overall situation is appalling. Estate agents suggest that rents are increasing by 20 per cent from a year ago in the capital, even while property prices are stagnant. There is widespread anecdotal evidence of potential renters being charged hundreds of pounds for viewings, even online ones. Rental terms in many areas are getting ever shorter, with landlords increasing rents at every renewal.  And, in a phenomenon which has in the past largely been confined to London, there are reports of an entire Welsh village being bought up by property developers, with residents facing an immediate sharp rise in rents.

The backdrop is an acute shortage of housing, and especially affordable housing. This has been exacerbated by the decision to end abruptly the mortgages interest rate tax relief on rentals. While there is a strong argument that this should be phased out over time, the sudden decision has left a gaping hole in the supply of properties as many landlords now find it uneconomic.

This has all been made worse by the decisions of the Bank of England to raise interest rates, even though we are in the highly unusual situation of experiencing ‘stagflation’, simultaneously a stagnating economy and surging inflation. 

The Bank of England Governor has foolishly blamed wages and early retirees for the upsurge in prices, rather than government policy on both sides of the Atlantic. Even in his own terms, how he expects higher interest rates to push down wages without creating unemployment is a mystery. Early retirees will also benefit from higher interest rates on their savings.

The unavoidable answer to the housing shortage is more public and social housing. But the determination of the government to prioritise the private sector in all matters means that almost none of any new home building is for council housing.  It is the government’s fault that there is such a sharp housing shortage; this government and its predecessors.

Yet they are not merely responsible for the source of the crisis. They have taken a series of steps to support landlords and disadvantage tenants.  In addition to Gove’s measure on mortgage interest relief, which drove out large numbers of individual landlords in favour of large property firms, there is now a proposal to allow easier evictions.

Ministers claim they are taking measures to deal with anti-social behaviour. They are actually moving the goalposts in favour of unscrupulous landlords, who will simply be able to claim anti-social behaviour to pressure existing tenants or to evict them, or just threaten a complaint.

At the same time, the government has delayed the implementation of new energy efficiency rules on rented properties, which is estimated to cost renters an extra £1 billion over two years for the worst insulated homes.

This shift in favour of landlords in the middle of a housing crisis is hardly a surprise. A quarter of Tory MPs are landlords and a fifth of all Tory Party donations are made by property companies.

Labour must commit to rectifying these abuses, supporting tenants, not landlords and to building 150,000 new council and housing association homes per year to tackle the housing shortage.

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