On May 30th, the current housing minister Eddie Hughes confirmed that the UK government is not considering rent controls in England at this time: –
“The Government does not support the introduction of rent controls. Historical evidence suggests that rent controls would discourage investment in the sector and would lead to declining property standards as a result, which would not help landlords or tenants. Recent international examples also suggest that rent controls can have an inadvertent negative impact on the supply of housing and may encourage more illegal subletting
Head of policy and campaigns at Propertymark, Timothy Douglas, (as quoted by Property Industry Eye) commented: “Only last month we urged the minister to study closely his department’s own statistics that show tenants are 40 times more likely to be made homeless because their landlord has become so disillusioned with the tax and legislative burden and wants to sell their property, than because they can’t afford the rent.” “The policy of rent controls may be popular among those looking for a short-term solution to rising market rents amid the cost-of-living crisis, but they will not solve the root cause of the problem, which is an undersupply of homes across all tenures. “In a free market, where rents are allowed to flex in line with demand, investment in the private rented sector is incentivised. This provides a far more effective solution to the issue of affordability and encourages the long-term supply of good quality housing.”
Rent controls are nothing new to the UK, and whilst the devolved governments of Wales, Scotland and Northern Ireland continue to pursue their own course the ‘Short History of Rent Controls’ briefing paper published in 2017 examines the impact of rent controls between WW1 and January 1989. The Increase of Rent and Mortgage Interest (War Restrictions) Act 1915 restricted rents to their August 1914 level. The Act was designed to prevent landlords from profiteering during the war years when demand for housing exceeded supply and was only intended to be a temporary measure. Further Acts followed but some form of rent control continued to apply (to certain dwellings) until the Housing Act 1988 deregulated rents on new private sector tenancies that started after 15 January 1989.
The minister’s full comments on rent control in England can be read here but unfortunately England has seen a high turnover of housing ministers in recent years and it is perhaps only a matter of time before rent controls become a talking point again especially given demand for housing exceeds supply as in WWI. We also explored rent controls in our 2022 Private Rented Sector So Far blog.
Posted 9/6/2022. This is intended to be an opinion piece only
