UK Seeks Rental Market Stability

The United Kingdom’s (UK) Housing Minister wants to provide rental cost protections to tenants that he believes will also help landlords by giving them a better idea of how to budget for growth. The proposed law, which would take effect in 2015, would tie rental increases in affordable housing to inflation that will ease pricing concerns among social tenants and help fund building projects. Proponents of the plan say that the new controls, which will be coupled with new government investment, will put needed affordable housing growth at its fastest pace in the last 20 years. For more on this continue reading the following article from Property Wire.

UK Housing Minister Kris Hopkins has offered a deal that will he says will give a decade of strong protection for social tenants with the cost of living.

The minister highlighted how this will also give greater stability for landlords, as they will be able to use this certainty to predict their likely revenues and invest in new homes.

He announced new proposals that would come into effect from April 2015 to give a fair deal for tenants and landlords alike. For tenants, annual rent increases will be linked to inflation using the more stable Consumer Price Index as a measure rather than the Retail Price Index as has been used in previous years.

In turn, it will give councils and housing associations the stability they need to plan investment in new homes in their area, supporting £23 billion public and private investment in affordable homes planned from 2015.

Hopkins said this will help towards achieving the fastest rate of affordable house building for the next two decades but he said he also wants to ensure landlords have the powers they need to charge tenants on higher incomes a rent closer to the market rate.

From 2015, these limits on social rent levels would be lifted for instances where tenants earn at least £60,000. And when possible, new rules would be introduced requiring those social tenants earning above this threshold to declare their income to their landlords.

‘These proposals offer a fair deal on rents for tenants, helping with their cost of living and ensuring those who can afford to pay more do and those on lower incomes know what to expect,’ he explained.

‘But it also offers the certainty and stability councils and housing associations need too, to plan ahead and invest their revenues to build more affordable homes in their area. This and the £23 billion of public and private investment planned in the three years after 2015, means we’re on track to deliver the fastest rate of affordable house building for two decades.

There is now a consultation process on the proposals open for discussion and the deadline for responses is 24 December 2013.

This article was republished with permission from Property Wire.

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