Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 26
26
Rejected
By getting rid of rent review clauses, the Government could be removing a mechanism for...
Recommendation
By getting rid of rent review clauses, the Government could be removing a mechanism for predictable and fair rent rises and replacing it with a system that relies on a resource-intensive and time-consuming appeals process. We recommend Reforming the Private Rented Sector 63 that the Government not abolish rent review clauses but make it a requirement that they stipulate by how much rents will increase. It should also legislate to require all rent review clauses to include break periods during which tenants may appeal to the First-tier Property Tribunal if they think their rent has risen above local market rents. (Paragraph 129) Miscellaneous
Government Response Summary
The government will not abolish rent review clauses, but states that landlords can increase rents once a year and tenants can challenge this at the First-tier Tribunal if they think it is above market levels. It will not set or steer rent increases.
Government Response
Rejected
HM Government
Rejected
The government wants to avoid very large rent increases being used as a backdoor to eviction, while ensuring that landlords can increase rents to market prices. In the new system, landlords, as they can now, will be able to increase rents once a year at the rate they deem appropriate. It is only if a tenant thinks this is above market levels that they can challenge this at the First-tier Tribunal. When this happens, an independent expert panel will assess the market price for the property. This could be higher, lower or in line with what the landlord set. The government is clear that rent should be agreed between the landlord and tenant, and nothing in our proposals prevents parties negotiating as they do now. It is not for government to set or steer rent increases and we do not support the introduction of rent controls. Evidence suggests that these would discourage investment in the sector and would lead to declining property standards as a result, which would not help landlords or tenants. Rent review clauses can provide a means of backdoor eviction through removing the right to challenge above-market increases and may reduce flexibility for landlords to respond to market changes.