XN000022-1977-12-07 — Page 11

WEDNESDAY, DECEMBER 7. 1977

TURNING TO POST-WAR DOMESTIC PREMISES. MR. SCOTT SAID THE BILL PROPOSED A FURTHER REDUCTION IN THE FACTOR REGULATING THE BIENNIAL RENT INCREASES CF SUCH PREMISES.

HE EXPLAINED THAT THE FACTOR WAS A PROPORTION OF THE DIFFERENCE BETWEEN FAIR MARKET RENTS AND CURRENT RENTS AND IT COULD BE VARIED TO REGULATE THE RATE AT WHICH RENTS WERE PERMITTED TO INCREASE.

+ IF THE FACTOR WERE TO REMAIN CONSTANT, AND ASSUMING OTHER CONDITIONS DID NOT ALTER SIGNIFICANTLY, THE BIENNIAL INCREASES EXPRESSED AS THEY ARE AS A PERCENTAGE OF RENT PAID WOULD BECOME PROGRESSIVELY SMALLER AND THE GAP BETWEEN CURRENT RENTS AND FAIR MARKET RENTS COULD NEVER BE CLOSED, MR. SCOTT SAID.

A FACTOR OF FIVE WAS APPROVED IN 1973 AND IT WAS REDUCED TO FOUR IN 1975.

+ IT IS NOW CONSIDERED THAT THE FACTOR SHOULD BE FURTHER REDUCED FOR OTHERWISE THE PROCESS OF NARROWING THE GAP BETWEEN REGULATED MARKET LEVEL RENTS WOULD SLOW DOWN PERCEPTIBLY.

+THIS WOULD BE PARTICULARLY NOTICEABLE IN THE CASE OF PREMISES FIRST BROUGHT INTO CONTROL IN 1970.

+ THE REDUCTION IN THE FACTOR TO THREE WOULD MAKE THE PROPOSED INCREASES GENERALLY SIMILAR, IN MONEY TERMS, TO THE INCREASES OF 1974 AND 1976.+

MR. SCOTT SAID FROM THE LANDLORDS' VIEWPOINT THE REDUCTION OF THE FACTOR NOW PROPOSED WOULD FURTHER CLOSE THE GAP BETWEEN CONTROLLED AND OPEN MARKET RENTS. ON THE OTHER HAND, THE TENANTS WERE PROTECTED BY THE OVER-RIDING RESTRICTION WHICH LIMITS INCREASES IN RENTS TO NOT MORE THAN 21 PER CENT OF THE CURRENT RENT, EXCEPT IN THE CASE OF RELATIVELY FEW LUXURY FLATS AND HOUSES AND IN PRACTICE, AVERAGE INCREASES HAD IN THE PAST BEEN GENERALLY LESS THAT. THE 21 PER CENT MAXIMUM.

+TENANTS WILL ALSO CONTINUE TO HAVE SECURITY OF TENURE PROVIDED BY THE PRINCIPAL ORDINANCE, HE SAID.

DEBATE ON THE MOTION WAS ADJOURNED,

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