Could rent controls solve the housing crisis?
Rent controls will be vital to solving our housing crisis. As Jeremy Corbyn said, rent levels are unsustainable – and in London they’re totally out of control.
In the last six years, rents in the capital have increased by a quarter, and Londoners spend over half their incomes on rent.
Legal rights to longer tenancies won’t be worth the paper they’re written on, if landlords are free to hike rents by however much they like and force tenants out of their homes and away from their communities, families, schools and work.
Around the world, there are numerous examples of how rent controls can bring housing costs under control. In the Netherlands, for example, rent rises are capped based on a measure of affordability that takes account of wage increases and the cost of living.
A similar policy in the UK would allow us to take control of the housing market and, combined with mass house building and secure tenancies, will help keep homes affordable.
With Londoners paying an average rent of £1,495 a month, more than twice the rest of the country, we need to see bold action.
But rent controls are not the answer and could do more harm than good.
History and more recent research by Shelter show that imposing rent controls acts as a disincentive to landlords. Given that demand for rental homes is rising, restricting supply would hurt renters, particularly those on lower incomes.
We need more, not fewer, rental homes. Landlords have been hit by a tsunami of changes on tax and regulation. Talk of rent controls adds to the sentiment that buy-to-let landlords are not welcome. There is no denying parts of the rental market are failing and practice in some parts of the sector is woeful. But what we need are policies that instigate the fast growth of quality, well-designed professionally-managed private rented sector. That means supporting the development of homes specifically built-to-rent.