The 1977 Rent Act’s security and fair rents could provide a basis for a more equitable system

APPLYING the Rent Act 1977 to new private tenancies would protect tenants from no-fault evictions and unfair rent increases, as well as releasing funds from reduced Housing Benefit spending for other purposes.

Margaret Thatcher introduced no-fault evictions in the Housing Act 1988, saying “let housing benefit take the strain”.

The cost of housing benefit has escalated beyond all expectations since then. By 1994 housing benefit had grown to £7billion (at 2024 prices) for one million private tenants.

By 2023 it had increased to over £12 billion for two million tenants. And there was an average increase from £7,000 per private tenant per year in 1994 to £11,000 per private tenant per year in 2024.

Decline of the private rented sector began in the 1920s as people fought to escape the slums of private landlords in which most working families lived, contrary to the claims of private landlords and their financiers who blamed the Rent Act 1977.

The withdrawal of mortgage interest tax subsidies for private landlords in 1966 accelerated the decline of the private rented sector as governments prioritised the building of homes for council housing and home ownership.

The Rent Act 1977 provided security of tenure and fair rents which allowed private tenants to challenge landlords on rent increases and failure to carry out repairs. Tenants or landlords apply for a Fair Rent by completing a simple three-page form consisting mainly of yes-no boxes.

Over time rogue landlords left the private rented sector as illegal evictions and harassment of tenants were criminalised.  Better housing conditions and fewer evictions in the private rented sector reduced pressure on council housing waiting lists.

With the benefits of the Rent Act 1977 accumulating and councils building new council homes until 1985 the outlook for housing was positive.

In 1992 mortgage interest tax subsidies for private landlords were re-introduced alongside other favourable tax changes and the decline in the private rented sector came to an end.

Home owners were disadvantaged when mortgage interest tax relief for them was abolished in 2001 but left unchanged for private landlords. Mortgage interest tax relief gives private landlords a price advantage over home owners who do not get the tax relief.

Profitability in the private rented sector increased significantly alongside changes in housing benefit rules. Before 2001 housing benefit could only be paid on the rent officer’s valuation even if the rent was higher. After 2001 the government set the housing benefit cap payable in each area according to average rents in the area. The same amount of housing benefit was payable regardless of the condition of the flats.

Private landlords who charged less than the housing benefit cap were hard to find and rents rapidly increased as did the private rented sector.

The fundamental flaw in the housing benefit system is illustrated by this example: a large two-bedroom private rented flat in Highgate close to the tube is assessed at a Fair Rent of £800 per month compared with the housing benefit cap of £1,585, thereby resulting in a £785 loss to taxpayers.

When Scotland introduced a new housing law in 2017 similar to the Rent Act 1977 to protect new private tenants from no-fault evictions housing benefit fell from £1.3billion to £757million in 2023. Even greater savings on the cost of housing benefit could obviously be made in England and Wales.

MPs in the new parliament should be pressed to support the use of the Rent Act 1977 to protect tenants from no-fault evictions and unfair rent increases.

• Maria Emilia Jennings is a housing campaigner who lives in Highgate and in May 2022 was a candidate there for Labour. She has worked in housing for a number of London councils for more than 20 years