Rent Increases: Green Paper (Hansard, 17 December 1998)

§ Lord Whitty

Tenants have been facing exceptionally high fair rent increases, following recent court cases. We received more than 500 responses to the consultation paper we issued in the summer which proposed limiting fair rent increases by applying a formula linked to the retail prices index (RPI). There was overwhelming support for this from individual tenants and tenants' organisations. They considered our proposed limits were too high, however, and we have responded to this.

We propose, therefore, to go ahead and introduce new limits by making an order under Section 31 of the Landlord and Tenant Act 1985.

Rent officers and rent assessment committees will continue to determine fair rents as they do now. Where applications for re-registration are made to the rent officer after the order comes into effect, however, fair rent increases will be limited to RPI + 7.5 per cent. for the first re-registration (rather than RPI + 10 per cent. as originally proposed) and RPI + 5 per cent. for subsequent re-registrations. This will ease the anxiety faced now by thousands of tenants, many of whom are elderly or on fixed incomes. It will give them certainty that their rents cannot be increased by more than these limits.

If there is no existing fair rent registration for the property, these limits will not apply. Nor will they apply if the rent officer or rent assessment committee considers that repairs or improvements carried out by the landlord have changed the condition of the property or common parts so much that the new rent should be at least 15 per cent. more than the existing registered rent. We believe that, in these limited circumstances 169WA only, it is fair for landlords to charge the full fair rent increase.

The new limits will apply to private tenants and secure tenants of registered social landlords who have a fair rent registered under the Rent (Agriculture) Act 1976 or the Rent Act 1977. They will not apply to rent increases for assured or assured shorthold tenancies under the Housing Act 1988. We have no plans to change the legislative framework for these tenancies.

The order will be laid immediately after the parliamentary Recess and will come into force shortly afterwards. We will make a further announcement when the order is laid. We will issue a leaflet for landlords and tenants explaining in detail when the limits apply and how rent officers and rent assessment committees will calculate them, and details will appear on our internet site.