(c) crown copyright
Catalogue Reference:CAB/129/81
Image Reference:0001
Printed
for the Cabinet.
April
1956
S E C R E T
Copy N o .
C P . (56) 101
20th April,
1956
CABINET
RENT
RESTRICTION
M E M O R A N D U M BY T H E M I N I S T E R O F H O U S I N G A N D L O C A L
GOVERNMENT
L a s t O c t o b e r , w h e n a p p r o v i n g m y p r o p o s a l s for t h e r e d u c t i o n of subsidies o n
C o u n c i l h o u s e s , t h e C a b i n e t i n s t r u c t e d m e t o i n c l u d e in m y s t a t e m e n t t o P a r l i a m e n t
a reference to r e n t c o n t r o l o n the following l i n e s : —
" T h e G o v e r n m e n t r e c o g n i s e t h a t t h e level of r e n t s of C o u n c i l h o u s e s a n d
t h a t of c o m p a r a b l e p r i v a t e l y - o w n e d h o u s e s a r e i n t e r r e l a t e d . I t is t h e r e f o r e
necessary t o review t h e w h o l e s t r u c t u r e of t h e R e n t A c t s . W e shall a n n o u n c e
o u r c o n c l u s i o n s in d u e c o u r s e . "
( C M . (56) 3 6 t h C o n c l u s i o n s , M i n u t e 7.)
2. T h e r e a f t e r , t h e P r i m e M i n i s t e r a p p o i n t e d a C o m m i t t e e of M i n i s t e r s —
M i n i s t e r of H o u s i n g (Chairman),
S e c r e t a r y of S t a t e for S c o t l a n d , M i n i s t e r of
A g r i c u l t u r e , M i n i s t e r of L a b o u r , C h a n c e l l o r of t h e D u c h y of L a n c a s t e r , SolicitorG e n e r a l a n d F i n a n c i a l S e c r e t a r y . T r e a s u r y — w i t h t h e following t e r m s of
reference: —
" T o c o n s i d e r w h a t modifications s h o u l d b e m a d e t o t h e R e n t R e s t r i c t i o n
Acts and to report to the Cabinet."
E x c e p t for a few o u t s t a n d i n g p o i n t s of detail, t h e C o m m i t t e e h a v e c o m p l e t e d their
review of t h e p r o b l e m , a n d t h e i r c o n c l u s i o n s are set o u t below.
Present Controlled R e n t s
3. T h e r e a r e a b o u t 13 million h o u s e s in E n g l a n d a n d W a l e s , of w h i c h n e a r l y
10 millions c o m e w i t h i n t h e s c o p e of r e n t c o n t r o l . Of these, a b o u t 5 millions a r e
let u n f u r n i s h e d a t c o n t r o l l e d r e n t s . T h e r e m a i n d e r are mostly o w n e r - o c c u p i e d .
4. T h e c o n t r o l l e d r e n t s differ widely. T h o s e of m a n y of t h e older h o u s e s
are b a s e d o n t h e r e n t s c h a r g e d in 1914, w i t h a n a d d i t i o n of 40 p e r cent. T h e r e n t s
of t h e r e m a i n d e r are m o s t l y restricted to t h e levels prevailing in 1939. S o m e r e n t s
h a v e risen following t h e H o u s i n g R e p a i r s a n d R e n t s A c t , 1954; b u t the effect of
t h a t A c t , w h i c h w a s a i m e d p r i m a r i l y at allowing " r e p a i r s i n c r e a s e s , " h a s n o t b e e n
great. F u r t h e r m o r e , t h e r e a r e , for a n u m b e r of r e a s o n s , glaring v a r i a t i o n s b e t w e e n
t h e c o n t r o l l e d r e n t s of c o m p a r a b l e h o u s e s .
Objectives of Policy
5. T h e C o m m i t t e e h a v e r e a c h e d the c o n c l u s i o n t h a t the R e n t A c t s s h o u l d b e
a m e n d e d w i t h o u t delay. T h e objective should b e t o get h o u s i n g progressively o n
t o a n e c o n o m i c basis, a n d in p a r t i c u l a r —
(a) t o allow l a n d l o r d s t o c h a r g e rents w h i c h a r e sufficient t o e n a b l e t h e m t o
k e e p their h o u s e s in g o o d r e p a i r ;
(b) t o e n c o u r a g e l a n d l o r d s t o re-let h o u s e s w h e n c o n t r o l l e d t e n a n c i e s c o m e
t o a n e n d , i n s t e a d of p u t t i n g t h e m u p for sale as they n e a r l y always
now d o ;
(c) t o i n d u c e p e o p l e w h o are living in u n n e c e s s a r i l y large r e n t - c o n t r o l l e d
h o u s e s to m o v e t o smaller h o u s e s ;
id) t o r e m o v e a n o m a l o u s v a r i a t i o n s b e t w e e n r e n t s of c o m p a r a b l e h o u s e s ; a n d
(e) t o c r e a t e u l t i m a t e l y a free m a r k e t in h o u s e s t o let. 49824 g 2
M a i n Provisions of Bill
6. It is n o t c o n s i d e r e d feasible t o a b o l i s h r e n t c o n t r o l i m m e d i a t e l y . O n t h e
o t h e r h a n d , the rents of h o u s e s w h i c h c o n t i n u e to b e c o n t r o l l e d s h o u l d b e a l l o w e d
t o rise u p to p r e s c r i b e d ceilings m o r e n e a r l y a p p r o a c h i n g e c o n o m i c levels a n d
fixed o n a u n i f o r m basis.
7. T h e C o m m i t t e e a c c o r d i n g l y r e c o m m e n d t h a t a Bill s h o u l d b e i n t r o d u c e d
e m b o d y i n g t h e p r o v i s i o n s set o u t b e l o w : —
(a) N e w m a x i m u m c o n t r o l l e d r e n t s (exclusive of rates) s h o u l d be" e s t a b l i s h e d
for all r e n t - r e s t r i c t e d houses a n d s h o u l d b e c a l c u l a t e d b y reference t o
t h e gross r a t e a b l e v a l u e of t h e h o u s e .
(b) L a n d l o r d s s h o u l d b e p e r m i t t e d to raise c o n t r o l l e d r e n t s u p t o a n a m o u n t
n o t exceeding twice t h e gross r a t e a b l e v a l u e of the h o u s e . ( T h e r e a s o n
for d o u b l i n g t h e figure is t h a t h o u s e s a r e assessed at 1939 values.)
(c) I n o r d e r t o a v o i d u n d u l y s h a r p increases, rents s h o u l d be r a i s e d i n t w o
or t h r e e stages. (It is suggested t h a t in t h e first stage t h e i n c r e a s e s h o u l d
n o t exceed Is. 6d. or, alternatively, 10s. 6d.)
(d) W h e r e t h e l a n d l o r d fails to m a i n t a i n t h e h o u s e in p r o p e r r e p a i r , the t e n a n t
s h o u l d be e n t i t l e d t o c l a i m a r e d u c t i o n of rent. D i s a g r e e m e n t s b e t w e e n
l a n d l o r d a n d t e n a n t a b o u t r e p a i r s s h o u l d b e referred t o t h e local
a u t h o r i t y , w i t h a r i g h t of a p p e a l to t h e C o u r t s .
(e) N o r e n t i n c r e a s e s h o u l d b e p e r m i t t e d for a h o u s e w h i c h is subject t o a
d e m o l i t i o n or closing o r d e r , or is in a c l e a r a n c e a r e a .
(/) A h o u s e in o w n e r - o c c u p a t i o n or of w h i c h t h e o w n e r o b t a i n s v a c a n t
possession s h o u l d b e released f r o m r e n t c o n t r o l .
(g) T h e M i n i s t e r s h o u l d b e e m p o w e r e d t o l o w e r , b y O r d e r from t i m e t o t i m e ,
t h e ceiling b e l o w w h i c h t h e R e n t s A c t s o p e r a t e , a n d t h e r e b y release a
c a t e g o r y of h o u s e s f r o m r e n t c o n t r o l .
8. T h e general effect of these p r o p o s a l s u p o n the level of rents is s h o w n in
t h e A n n e x . It is e s t i m a t e d t h a t the r e n t increases involved w o u l d raise t h e n e w
C o s t of Living I n d e x b y n o t m o r e t h a n t w o points.
Timing of Legislation
9. A s s u m i n g t h a t t h e p e r m i t t e d r e n t increases w e r e applied in t w o o r t h r e e
stages, their full i m p a c t w o u l d n o t b e felt for twelve t o e i g h t e e n m o n t h s .
10. I n o r d e r t o give sufficient t i m e for t e n a n t s t o get over their initial
a n n o y a n c e a n d for t h e beneficial effects of t h e policy t o b e c o m e e v i d e n t before t h e
n e x t G e n e r a l E l e c t i o n , t h e C o m m i t t e e strongly u r g e t h a t the m e a s u r e s h o u l d b e
e n a c t e d at once.
11. P a r l i a m e n t a r y C o u n s e l h a s c o m p l e t e d a first d r a f t of t h e Bill, w h i c h c o u l d
b e r e a d y for p r e s e n t a t i o n t o t h e Legislation C o m m i t t e e before W h i t s u n .
Recommendation
12. T h e C o m m i t t e e a c c o r d i n g l y r e c o m m e n d t h a t a Bill, e m b o d y i n g t h e
p r o v i s i o n s s u m m a r i s e d i n p a r a g r a p h 7, s h o u l d b e i n t r o d u c e d as s o o n as possible
w i t h a view t o its p a s s a g e d u r i n g the p r e s e n t Session.
D . S.
Ministry
of Housing and Local
Whitehall
S.W.1.
19th April,
1956.
Government,
EFFECT
UPON
RENTS
T h e g e n e r a l effect of increasing rents t o twice t h e n e w g r o s s r a t e a b l e v a l u e is
s h o w n b e l o w . ( T h e s e tables d o n o t i n c l u d e t h e \ million restricted h o u s e s in t h e
C o u n t y of L o n d o n , for w h i c h figures a r e n o t yet available.)
(a) The
new maximum
rents
for 1,250,000 h o u s e s
,, 1,000,000
850,000
,,
,, 1,000,000
,,
500,000
,,
(b) The maximum
increases
for 1,000,000 h o u s e s
1,000,000
1,100,000
850,000
370,000
170,000 50,000
(exclusive of rates) would
be—
u p to 11s. 6d. a w e e k lls. 6d. t o 15s. 6d. a week 15s. 6d. t o 20s. a w e e k 205. t o 30s. a w e e k a b o v e 305. a week. in rent would
be—
u p to 55. 6d. a w e e k 55. 6d. t o 75. 6d. a week 75. 6d. t o 105. 6d. a week IO5. 6d. t o 155. 6d. a w e e k 155. 6d. t o 205. a w e e k 205. t o 305. a w e e k
m o r e t h a n 305. a w e e k .
2. If, in t h e first stage, increases of u p to 75. 6d. a w e e k were p e r m i t t e d , the
r e n t s of s o m e 2 million h o u s e s (including L o n d o n ) w o u l d r e a c h their n e w ceilings
at o n c e , o r a b o u t 3\ millions if a limit of IO5. 6d. w e r e a d o p t e d .
3. I t s h o u l d b e e m p h a s i s e d t h a t the figures given a b o v e a r e m a x i m a . F o r the
g r e a t m a j o r i t y of h o u s e s t h e effect w o u l d be smaller t h a n the a m o u n t s q u o t e d .