Rent Act Loophole | IMG Archive

The scan: The Week v6 no17.pdf (PDF, Marxists Internet Archive, opens at this page)

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letter to The New Statesman from Frank Allaun, MP. A striking anomaly in the application of the Rent Act, one that should be ended, was re ealed in a hearing I attended recently. A property company had bought a row of ten terraced houses in an industrialised area with maximum controlled rents of just under £1 a week, plus rates. One of these became decontrolled some time ago by a change of tenant and the new rent was raised to £3. 10s. The tenant took his case to the rent officer, who fixed a rent of £2, 2. 6d. Whereupon the landlord took the case to the rent assessment committee. He was ably represented by a lawyer (the tenant had none and only uttered one sentence throughout the hearing). One of the lawyer's strong points was that the owner had sold one of the houses, which were identical, for £1,200. So, assuming a return of 123% on his capital, he thought that £3. 10s. or at least £3 was reasonable, The tribunal put searching questions and drew out the fact that the company had kept the house empty for seven months before they were able to sell it at that price. But then came the really pertinent question, "Whilst you are not required to answer this question", said the chairman, "would you like to tell the committee how much you paid for these houses when you bought them seven years ago?" This the property owners chose to ignore. (I happen to know that the 10 houses were bought for £1,900, or £190 each)> On such a low purchase price the landlord's return on his capital was phenomenal. This buying up of 19th Century controlled property for a song is taking place all over the North, (Incidentally, the committee decided to raise the rent to £2. 7. 6d.) Surely the rent assessment officer should be entitled te ask such a question and obtain an answer. The Act says that regard must be paid to all the rele*nt factors, What could be more relevant than this ? Para 10 Schedule 3, of the Act says that the Cammittee may demand 'such further information as they may reasonably require'. It could hardly be held unreasonable to require this particular information.