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Minister launches probe into “drastic” rent hikes

Minister launches probe into “drastic” rent hikes

Wednesday 24 June 2020

Minister launches probe into “drastic” rent hikes


The Housing Minister has launched a probe into a private estate planning “drastic rent increases” in the autumn.

Senator Sam Mézec is now calling for the current rent freeze to be extended while he draws up measures to stabilise the market.

He launched the investigation into the estate after being approached by a tenant facing as much as an 80% rent increase once the emergency rent freeze brought in to protect islanders during the pandemic falls away at the end of September.

Elaborating on the kinds of reports he’s been receiving, Senator Mézec told Express: “There’s a particular estate on the island where I’m receiving a few reports from people there that rents are being proposed to go up quite dramatically in October. The people in that estate are reacting differently to it; some are terrified whereas some are just going to move and go somewhere else, so they’re not complaining. Every report back to me is completely different."

Speaking about the report where the tenant was facing an 80% rent increase, he said that he was concerned that the issue may also be affecting other properties in the area, adding: “With that specific case I’ve asked for Environmental Health department to look at it to see firstly if it’s legal and if it’s not how that can be dealt with.”

However, if the increase is legal, the Minister said that it will require a longer-term response which he suggests should take the form of extending the temporary rent freeze until he can draw up further measures to stabilise the rental market locally.

“It’s possible that lots of other people who haven’t been in touch with me may face extortionate rent increases whether it’s – even a 10% increase I’d still say it’s extortionate given cost of living – then I will want to take political action on that.

“But that will require other Ministers and other politicians agreeing with me on what action we could take, because when the law falls away, that’s it, it’s gone. So, we’d have to have something to replace it, if we wanted to deal with that." 

When asked by Express about how he expects to understand the scope of the issue when he’s relying on individual reports, the Minister replied: “I would say that the theoretical is enough as far as I’m concerned. It is possible at the end of September that there will be people in Jersey who, having had a horrible time over the last few months, will be faced with the prospect of paying rental debt and paying a rent increase on top of that.

“And if that’s a few hundred people, maybe a few thousand people, that’s not good for our economy, it’s really, really bad to have those people suddenly see their spending power reduced in this way.” 

This forms a major part of Reform Jersey’s ‘New Deal’ package of measures for economic recovery which suggests a number of rental interventions in order to support islanders in rented housing in the aftermath of the health crisis. 

Prior to the covid outbreak and the resulting lockdown, the Housing Minister had expected to publish the findings of the Housing Policy Development Board in April. This has now been pushed back to September, but Senator Mézec did reveal to Express that it is due to recommend measures to stabilise the rental market.

Reform_party.jpg

Pictured: Reform Jersey have lodged their own suggestions for economic recovery.

The Senator said these could include “banning particular types of rent increases and giving tenants the right for longer tenancies and rights of renewal when tenancies expire at their current rent levels” as a means of holding back and spacing out rent increases.

“What I would suggest is that rather than letting the rent increase [ban] fall away at the end of September, then we propose rent stabilisation and then it takes me however many months to put the legislation together, let’s extend the rent freeze until rent stabilisation is ready and in force. So, rather than having a few months of chaos in between, let’s just extend it until we’re ready to step into rent stabilisation in the first place.” 

Depending on the level of Government support and resource, Senator Mézec estimated he could put this legislation together within a year.

The Minister also indicated that the Policy Development Board has made a recommendation to create a Rent Tribunal “where people who thought the rules were being broken could have somewhere to go to get it challenged and enforced.”

When asked how he responds to criticism that his policies favour tenants’ rights over landlords, the Minister said: “Being a landlord is the same as any other business and it ought to be treated the same. If they want to make a living in that business, then good luck to them and I hope we will provide a good regulatory framework to give them certainty in how they can do it. 

“But I don’t believe the job of the Housing Minister is to pander to business interests, it’s to, instead, secure people’s basic human right which is the right to access to decent housing. Good landlords have nothing to fear under these proposed regime changes, but I have encountered some bad landlords in my time and if I can get rid of them then I’ll consider it a job well done.”

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Posted by Rik Maguire on
Rental increases should be defined in the lease; I expect the problem arises when the tenant leaves as this is when the landlords generally increase the rent to market value. Unfortunately the market value has increased dramatically, probably due to the 1300 additional people arriving to live every year. Most estate agents are keeping properties on their websites to look good, however they are not actually available. Lack of availability is stressing the market and pushing up prices beyond the means of an average wage. (as I can personally verify!)
Posted by JonathanQueree96 on
Surely the level of increase appropriate in each case will depend on whether the unit is let at Market Rent in the first place. As ever, we need more facts to know what's going on here. Its a free market and as seems to be the case with some tenants in this case, they can always move elsewhere if they feel the rent is unfair / a better deal can be had elsewhere.
Posted by Jon Jon on
Mezec is after controlling the rental in the private market,I'd like to see his proof though on this matter, an 80% increase in the autumn from a private estate?Its blatantly obvious that some states members want a landlords register, but they have to realise that any costs will be passed to the tenant.They fall on the side of the tenant every time, well lets have a register of tenants and mark them for how good they are.The way Mezec and Young are going about this is going to mean less rental accommodation and a higher price.I know someone who lets out a two bed accommodation ,a reasonable rent ,they could get higher and have been told, that person pays tax on that income, without it they would be paying no tax and would be eligible for payouts via social security, therefore costing the Island more.Mezec has so much to learn about the real world.
Posted by Dave Mathews on
I cannot see how Senator Sam Mézec can extend the rent freeze any further for the private sector.
The Government can only dictate so much before it's seen as meddling in the market.
Posted by John Henwood on
Senator Mézec should be renamed Mr.Cellophane, his actions are so transparently obvious. Of course, this is all about controlling the private sector which is anathema to him. It seems he and his left of left buddy the Environment Minister are working together to try to force through legislation to control the rental market. They continue to talk to a few disaffected contacts who have an axe to grind and are blind to the fact that the overwhelming number of landlords want to keep good tenants happy.
Posted by Jon Jon on
The government and mezec want to control rents in private sector,tried before and didn’t work,Didn’t they meddle with guest houses years ago,telling them do this and that and charge this as payment to guests,why so many closed.
Posted by Davey West on
It must be obvious to anyone than a rent increase of 80% ( lets assume from £100 per week to £180 ) is ludicrous and could it be that if true and proved mybe the land lord has just refurbished with a new bathroom/ kitchen, and whitegoods as well as satellite TV ? Formal proof is needed no hearsay Minister Mezec. As a fact many peope have gone back to Poland and away from the island. As a fact many businesses will be laying off staff and closing down due to Covid 19 and uncertain future earnings. I suggest Minister Mezec means well but Government has enough to do trying to run itself without messing up the private sector that through taxes support a top heavy expensive administration. It won't take many more straws to collapse business confidence in the States after the collapse of earnings brought on by the pandemic.
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