Thursday, 27 November 2014

£14,109,984 – the total rent paid by Ilkeston tenants a year


 

In the last few months, politicians in Westminster have decided to step into an area which affects many of us - property. Anyone who rented property in the 1970s and 1980s knows the difficulties of tenancy agreements from that era which allowed the tenant the right to stay in the property for life. In some cases, tenancies could be transferred to their children, rents could not be increased and tenants could not be removed. One of the suggestions by one of the opposition parties is rent controls. With more than 4.4 million people renting 3.4 million properties in England alone, it was clear that this could be a policy that was purely playing with the sentiments of these tenant voters.

Under the current legislation, tenants are already in a position to challenge rent increases that are unreasonable and they have the advantage of giving a months’ notice to the landlord (when the tenancy is a rolling agreement ie periodic tenancy) . But do rents need capping? Well in Ilkeston, there are 5,235 people renting 2,333  rental properties. The average rent of a Ilkeston property in 2008 was £525 per month. If Ilkeston landlords had raised the rents in line with inflation, (which sounds a very fair to anyone), as inflation has been a total of 19% since 2008, the average rent in Ilkeston should be today £525 + 19% = £624. At this moment in time, the average in Ilkeston is £504.. and those figures are being repeated all around the UK.

However, restricting rent rises in the future could put more properties back on the market for sale as it would destroy the confidence in the housing market. In turn, this would reduce property prices. With less property available to rent, and a lack of interest from potential investors (due to the poor yields) this policy would end up creating a shortage of affordable housing.

Even with the vast increase in renting in Ilkeston over the last ten years, (5.85% of property being rented in 2001 to 11.8% in 2011), the number of homeowners in Ilkeston only dropped by 3.2%.  It is clear that the changes to the law of tenancy agreement made in Housing Act 1988 resulted in benefits to both landlords and tenants. The law has made it easier to rent a property and at the same time, the Assured Shorthold Tenancy gives the tenants a right to quiet enjoyment of the property for a period of time. Yes, the total rent paid by Ilkeston tenants is an awful lot of money, £14,109,984 a year in fact, but as rents are free to move up, but just as important down, why fix what isn’t broken?

 

 

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