Tribunals Still Approve Rent Hikes of Up to 88% in England
Labour promised the Renters' Rights Act would help tenants fight unfair rent rises. Since it took effect in May, challenges are at record levels, but tribunals are still waving through big increases, and tenants and landlords alike say the system is not working for them.
Most tenants who challenge still pay more
London Renters Union (LRU) analysed data from May to October. It found that 80% of the tenants whose cases reached a tribunal ended up with a higher rent, on average £1,200 a year more. In most cases the rise was smaller than the one the landlord had proposed.
In 36% of cases the tribunal granted the whole increase the landlord had asked for. In 42% it was reduced, in 16% it was cancelled, and in 6% the rent was lowered.
Dagenham at one end, a £200 cut at the other
One tribunal approved an 88% increase on a property in Dagenham. The tenant, whose rent was covered by housing benefit, said the rise would cause undue hardship. The tribunal still let the monthly rent go from £1,200 to £2,250.
At the other extreme, the tribunal found one rent too high and cut it by £200, after the tenant contested a £17-a-month rise.
Tenants' unions are concerned that rises of 30% or more are regularly approved. LRU's Jae Vail asked: "What could be a better definition of an unreasonable rent increase than 40% or 80%?"
Delays and doubts over how rent is judged
Renters face growing waits for hearings. Some tenants in London have been asked to attend in the Midlands because of backlogs. There is also no consistent method for deciding fair market rent, according to tenants and landlords.
Vail said the system gives little protection where rents across a whole area are climbing fast, because it is hard to show that a rise is out of character.
Chris Norris, chief policy officer at the National Residential Landlords Association, said an overstretched workforce was raising worries about the accuracy of decisions. He said only just over 30 full-time judges are working on these cases and no extra capacity has been added. Some judgments, he said, rest almost entirely on searches of Rightmove or similar sites.
Norris also said some tenants' unions are urging members to challenge every rise, which he called an "abuse of the system". Oxford Renters Union has asked members to pledge to take rises to tribunal. The unions reject the idea that renters are flooding the system.
What the Act changed, and what groups want next
Under the May changes, a tribunal cannot award more than the landlord asked for, and a rise cannot take effect before the decision date. Ending no-fault evictions has also cut the risk of landlords retaliating. Applying costs £47.
Generation Rent's Nye Jones said the tribunals have worked well since May but that further change is needed. Renters' groups want the government to set controls on rent rises nationwide.
A spokesperson for the Ministry of Housing, Communities and Local Government said the Act lets tenants challenge above-market rises. The department says tribunals have in some cases cut such rents by hundreds of pounds a month or ruled there should be no increase.
Our View
The tribunals are now doing two jobs at once: protecting tenants from rises used as a back door to eviction, and setting a market rent that can still go up. The figures suggest the second job is where most of the dispute lies. Staffing, and how judges settle on a fair market rent, are the points that could decide whether trust in the system improves.
Source: The Guardian