Peer slams government’s rent tribunal plan and calls for cap on rent increases

A Conservative Peer and former Housing Minister claims the government’s proposed rent tribunals are not the solution and calls for rents to be raised only ONCE every four years.

Lord Young of Cookham, argues that letting renters appeal unreasonable rent increases at First-Tier Tribunal is “ill-equipped” to solve the problem.

Instead, he supports an amendment in the Renters’ Rights Bill by Lord Best, which would limit rent increases to either wage growth or inflation for four years, after which rents could be raised to market levels.

Wildly inconsistent decision-making

In an article for The Times, Lord Cookham claims he does support the abolition of Section 21 but says the government is making a “big mistake” with part of the Renters’ Rights Bill.

He explains that once Section 21 is abolished, the in-tenancy rent increase process becomes even more important because landlords will no longer be able to evict tenants who object to a rent rise. He calls for a fair mechanism that balances the interests of both landlords and tenants.

Lord Cookham criticises the government’s proposed solution to allow renters to appeal “unreasonable” rent increases at first-tier tribunal.

He explains to The Times: “A thorough scan of tribunal decisions shows wildly inconsistent decision-making. There are cases where tribunals did not physically inspect properties but relied on Rightmove or Google to approve substantial rent increases.

“In a case in December 2023 a tribunal simply “viewed the exterior from a Google Street View image”, using a year-old image of the property exterior, to approve a 41% rent increase. And on another occasion, a tribunal cited their “own general knowledge” of local rents to justify a decision.

“I fear the tribunal will be totally ill-equipped to mediate rent increase disputes for England’s 12 million private tenants.”

Replace private landlord who is now selling up

Lord Cookham argues the build-to-rent sector is becoming increasingly important as small private landlords leave the market.

He tells The Times: “What is needed now is the encouragement of long-term institutional investment in property for rent to replace the private landlord who is now selling up. Such institutions won’t need to give notice because they will want tenants to stay as long as the tenant wishes.

“These landlords will need a functioning renting market giving certainty, not individual tribunals agreeing or rejecting rent increases based on opaque criteria.

“Larger, institutional landlords, managing hundreds or thousands of tenants, face a potential administrative nightmare if even a small portion of their tenants regularly appeals rent rises, with cases taking up days of staff time. This could undermine investment from the build-to-rent sector, which the country needs.”

However, Lord Cookham fails to mention that for many tenants, particularly those on low incomes, build-to-rent remains simply unaffordable, with one London development charging £2,600 a month for a studio flat and £4,600 for a three-bedroom flat.

Limit rent increases to wage growth or inflation for four years

Lord Cookham claims the “complicated tribunal system” will do nothing to help landlords and tenants and urges peers in the House of Lords to back an amendment from Lord Best to cap rent increases to once every four years.

He explains to The Times: “I am supporting an amendment to the bill from Lord Best (former chair of the Affordable Housing Commission), which would limit rent increases to wage growth or inflation for four years, after which they could be raised to market levels.

“This would give landlords the certainty of modest annual rent increases, and tenants more security in their homes in the early years of a tenancy, before a “release valve” every four years prevents rents from diverging too far from the market rate.

“I hope the government will consider it. If not, I fear the issue will be back on ministers’ desks before long.”

Lord Cookham’s full article in The Times can be read here (for some users this may be behind a paywall)