Private Rent Controls Don’t Work
A leading agent is the latest industry figure to speak out against private rent controls, which continue to be advocated by Labour politicians in the run up to December’s General Election.
Paul Sloan, development director for Haart, says: “Private rent controls sound great in theory, but unfortunately the reality is that they simply do not work. Around the world we have countless examples of cities which have introduced rent controls, but that has done nothing to address affordability issues.
“The risk is that landlords are dissuaded from entering or staying in the market, which reduces the supply of available homes and can in turn inflate prices – the very thing the controls are brought in to avoid.
“Rent controls discourage landlords from investing in their properties which can mean that the supply of rental housing is of a lower quality than it would otherwise be, and tenants can find that repairs and maintenance are no longer a priority for landlords.”
Both the leader of the Labour party nationally, Jeremy Corbyn, and the leader of the party in Scotland, Richard Leonard, say they want to introduce rent controls in some cities; left-leaning think tanks including the Fabian Society and the Resolution Foundation have also called for them; and Labour London Mayor Sadfiq Khan says he wants to be given powers to introduce them in the capital.
However, Haart’s Sloan says extensive research from trade bodies including the Residential Landlords Association shows that such controls always backfire.
“An example from Berlin has shown that rental controls actually made rents rise by about 10 per cent over two years, whereas before the controls were introduced they rose by about one to two per cent per year” claims Sloan.
“We believe that rental controls are no substitute for a functional market where homes are fairly priced and well-maintained. Rather than plumping for a system which has been proven not to work, we call upon the [London] Mayor and the government to work alongside private landlords to discover measures that will keep them in the market and find ways to entice new people into becoming landlords. After all, increasing the supply of good quality homes into the rental market is by far the best method of keeping rental prices at a reasonable level.”