BLOG: 5 reasons why the UK should implement rent controls

Author: Abi O’Connor

It’s a widely accepted fact that the private rented sector is in crisis — with a key driver being the affordability of housing. There are 4.6 million households renting privately in England and a significant amount of them are being forced to pay over a third of their income on rent. These excessive rents mean families are often being priced out of their homes, left unable to afford other essentials like food and clothing, or forced to accept poor quality and even dangerous conditions.

In the long term, we need more council homes to ensure everyone has a safe, secure and accessible place to lay the foundations of a good life. But why are those in power so reluctant to consider the most obvious and immediate solution to this crisis — rent controls. Here are five reasons why we should be implementing rent controls to benefit people and the economy:

1. Rent controls work to keep private landlords in check
Rent controls are not designed to punish landlords but to curtail the ability for private landlords and developers to make unrestricted profits from a basic human need. Historically this has worked. Rent controls were a key facet of 20th century housing policy in the UK, utilsed to curb landlord profiteering during war and interwar periods of crisis. In the 1980s, when the UK had robust rent controls and a significant stock of council housing, the average person in the UK paid 10% of their income on rent. Today, with no controls on spiralling rents, this figure has risen to 33%, reaching heights of 45% in Manchester and 57% in London.

2. Rent controls would reduce the subsidies the government pays to private landlords
Spiralling rents mean an increasing amount of public money is being used to subsidise landlords through the payment of local housing allowance. NEF analysis has shown that between 2021 and 2026 up to £70bn of government money will end up in the hands of private landlords, this is while over a third of tenants living in damp and mouldy homes. Introducing controls on rents would stop this transfer of public money into the pockets of landlords and could be used to build much needed social housing.

3. Rent controls would benefit local economies
Unaffordable rents are a problem for everyone, not just private renters. The UK’s value for money in terms of housing is very poor, and this has a negative knock on effect in the rest of the economy as tenants have less money to spend. If tenants had more disposable income they would be able to spend more of their money in the local economy, thereby contributing to economic growth — a key priority for the current government. If rents are lowered then the cost to government from local housing allowance would also shrink, meaning public money can be redirected into other much needed services — like the NHS, education, and council housing.

Rent controls coupled with other policy levers, like housing acquisition, social house building and community right to buy can significantly alleviate the current housing crisis. They would have the most transformative impact for the poorest in society, who are at the sharpest end of rent extraction. 

4. Rent controls are popular in the UK and internationally
Rent controls are a popular policy with the general public. Recent polling found that 71% of people in England support rent controls as do almost half of landlords questioned.

Such popularity is mirrored outside of the UK. Currently over 20 countries have some form of controls on rents, including Australia, six American states, India and 16 comparative European countries, including Germany, Sweden and Denmark. Advanced economies without rent controls are in the minority. While housing costs in the UK are 44% higher than the average Western European country, leaving low and middle-income families in Britain significantly worse off than their Dutch, German and French counterparts.

5. Without rent controls, much of the good progress in the Renters Reform Bill is likely to fail
Whilst the Renters Reform Bill is a hard fought step forward for renters seeking to secure basic rights in their homes, the bill fails to take any measures to address the fundamental problem: that rents are too high. As such, alongside the implementation of this bill must come interventions which address the crisis of affordability, otherwise the widely celebrated abolition of Section 21 ​‘no fault’ evictions will be in vain, as tenants will still face being evicted from their home because their landlord has increased their rents again.

The crisis in the private rented sector shows no signing of easing. That’s why the Homes for Us Alliance have launched a new campaign calling on Mayors to demand the powers to control rents in their localities. Find out how you can get involved by writing to your mayor here, and sign up for updates on the campaign here.