Labour chiefs say landlords are wealthy so rents shou...

A host of local Labour leaders including mayors Andy Burnham and Sadiq Khan are leading a call for an immediate private rent freeze.

They say most landlords are sufficiently wealthy to weather the current cost of living crisis, earning a median annual income before their income from rent of £55,415.

Against this claim they also say that “rent increases of 30-50 per cent are increasingly common.”

The mayors have been joined RMT rail union leader Mick Lynch and by a large number of less high profile Labour council chiefs, plus Green Party leaders, anti-landlord activists and charities in signing an open letter on the subject to Housing Secretary Michael Gove.

The letter says:

Dear Rt Hon Mr Michael Gove MP,

We are writing to urge the government to follow the Scottish government and introduce an immediate freeze on rents, to help renters weather the worst of the cost of living crisis and help prevent huge numbers of renters facing homelessness in the coming months.

Rising costs of food and energy mean millions are struggling to make ends meet. Last year 2.5 million renters were behind or constantly struggling to pay their rent.

At the same time, rents have been skyrocketing across the UK, rising fastest in Manchester, Bristol, Sheffield and Birmingham, reaching as high as 20.5 per cent.

Rents in London have gone up 17.5 per cent on average last up year, and rent increases of 30-50 per cent are increasingly common.

Renters are among the worst affected by the cost of living crisis. Prior to this crisis, renters were already spending four to five times as much as owner-occupiers on housing.

Yet landlords, with the encouragement of letting agents, are using this crisis as an opportunity to introduce rent hikes. In September 2022 alone, one million renters faced a rent increase.

Some landlords will be struggling with increased mortgage costs, but many will not.

Generation Rent research shows that just 11 per cent of rent increases in 2022 were the result of higher mortgage rates.

Just under half of rental properties have a mortgage and most of those have ‘interest only’ mortgages. The vast majority of landlords have far greater financial resilience to weather the storm ahead, with the median annual income of landlords before their income from rent is taken into account at £55,415.

In comparison, many renters are low paid, in precarious work and have no savings or assets. Some landlords that are facing increased mortgage costs are trying to pass those costs on to renters that simply cannot afford it.

People living in private rented housing are all too often forgotten by the government.

During the pandemic, the government introduced a temporary freeze for mortgage holders, but nothing close in comparison for those renting. Renters are still desperately waiting for the ban on no-fault evictions that the Government has been promising since 2019. Since last year there has been a 121.1 per cent increase in the number of households served a section 21 notice.

It comes as no surprise that 1.7 million households could become homelessness in these colder months.

The immediate support renters need in the crisis is clear. The Scottish government has introduced a freeze on rents until at least March 2023, with an accompanying ban on evictions.

However, the Scottish government does not have the power to embed support for low income mortgage holders within a rent freeze, whilst our Government does.

A rent freeze could be accompanied by support for mortgage holders – ensuring renters and lower income homeowners do not lose their homes through the crisis.

The Mayor of London has repeatedly called for such measures to be introduced in England and Wales. A rent freeze would immediately relieve pressure on millions of people and halt an eviction crisis that would have a devastating social impact, and cost local councils and the government millions.

The Government must now act to protect renters. We therefore call on the government to follow the lead of the Scottish government and:

- Introduce an immediate freeze on rents to protect renters;

- Implement an immediate ban on evictions until the cost of living crisis is over;

- Deliver on the commitment to end section 21 by fast tracking the much-delayed Renters Reform Bill.

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Jo Westlake
24 February 2023 10:47 AM

Statistics can be spun any way that suits the narrative.
While 70% of landlords may be basic rate tax payers what percentage of rental properties does that 70% own.
How many higher or additional rate tax payers are only in those bands because of Section 24?

Jo Westlake
24 February 2023 14:06 PM

I forgot to add that if we were taxed in the same way as EVERY other industry on those figures we would be basic rate tax payers and pay £5000 less tax. Younger landlords wouldn't lose their Child Benefit.
If we were treated as a business we could pay into a SIPP and get the pension tax relief that EVERYONE ELSE can get.
If we had chosen to invest our money in ISAs instead of deposits for housing our returns would be tax free.
We are massively discriminated against in every aspect with the current tax situation.

Jo Westlake
24 February 2023 13:31 PM

It's terrifying numbers. I'm dreading my end of year figures this year. I'm actually somewhere between your illustration and mine but with about 45% borrowing. About half of my mortgages come off their current fix at some point in 2023, so mortgage payments will increase significantly. As far as I can work out it's physically impossible to increase rents enough to cover the extra mortgage payments because the government will take 60% of any rent increase before the extra mortgage costs are factored in.

Dani Simmons
26 February 2023 08:42 AM

Jo, I would do what I have done and sell some assets and be mortgage-free. You don't need the headache. Accept we live in a banana republic where a dictator will turn a business making money into a loss-making entity with one stupid decision without any thought whatsover (removal of section 24). I don't think it's worth doing business, investing your hard earned money into such a system. You can get much better returns in other countries with more stable governments not a 2.5 trillion debt-ridden, bankrupt bunch of scumbags.