Assessing the evidence on Rent Control from an International Perspective

Oct 29, 2018 | Housing Supply & Rents, Regulation & Enforcement, Reports

This short independent review was undertaken by the authors at the request of the Residential Landlords Association (RLA).

The context of this report is the more than doubling of the size of the private rented sector since the turn of the century, the increasing tensions around affordability and the evidence in other countries.

The study was focussed on a review of the different approaches to rent control; an assessment of the current body of academic and other relevant literature; and a comparison of international examples of rent controls with the aim of making policy recommendations to the RLA.

In undertaking the research we began with a typology of rent controls and related regulatory requirements; we then undertook a focussed literature review covering academic and policy debates in the UK and abroad covering rent control and wider regulation of the private rented sector  as well as evidence of changes over time; we consulted with experts from a number of countries with widely different experience of rent control; and we hosted a roundtable for invited experts, practitioners and policymakers with specialist knowledge of the private rented sector (PRS).

Our country updates highlight the fact that regulation of the PRS is a live issue in many countries. This is mainly a result of rapidly growing private rented sectors in pressured housing markets.

In some countries, notably Germany, France and Ireland, policies have been introduced to tighten the regulatory and rent determination regimes. An important element has been the identification of pressure zones where rent controls have been tightened considerably.

Overall, therefore what had been a fairly clear trajectory towards liberalisation appears to have been revered to limit rent increases as a result of political pressures in the face of market pressures.

The discussion at the expert roundtable gave a clear sense that a broad consensus existed around a number of key elements in the debate. These included:

  1. Rogue/criminal landlords give mainstream landlords a bad name. There should, therefore, be stronger enforcement by local authorities.
  2. Many landlords would be happy to offer longer-term security, as long as enforcement procedures are working properly,
  3. Landlords remain concerned about indefinite security especially if clear-cut exemptions are not in place. They see the way forward more about enabling a range of tenancy models which landlords can choose to provide.
  4. There are other pressures building up, including short-term lettings; the lack of housing for poorer households; cutbacks in housing benefits; and changes in the welfare system more generally; and increases in property taxation which impacts on a sustainable PRS.
  5. More evidence both on what is wanted and what has been the impact of regulatory change is needed,
  6. The sector needs to be responsive to the changing political mood with the objective of developing a modern private rented sector which meets the diversity of demand by a wider range of provision.

We conclude that the PRS is a crucial part of the solution to UK housing problems and this requires a more positive stance towards the sector. The focus for reform should be on putting in place a system which allows longer term tenancies (for those that want/desire them), alongside a much better enforcement system which tackles both poor tenants and landlords.

 

The views expressed in this report are those of the authors and do not necessarily reflect those of the Residential Landlords Association.

About the Authors

Christine Whitehead

Christine Whitehead

Emeritus Professor in Housing Economics at the London School of Economics

Christine Whitehead is Emeritus Professor in Housing Economics at the London School of Economics.  She is an internationally respected applied economist concentrating mainly in the fields of housing economics, finance and policy.  She works with a wide range of international agencies as well as regularly for the UK government and Parliament.

Major research themes have included analysis of regulation and rented housing, the role of private renting in the UK and Europe and European models of housing finance. Her latest publication on private renting The Future Size and Composition of the Private Rented Sector (with Kath Scanlon and Chihiro Udegawa) was published in June 2018.

Dr Peter Williams

Dr Peter Williams

Departmental Fellow, University of Cambridge

Peter is a researcher and Departmental Fellow, Department of Land Economy, University of Cambridge and recently collaborated in a review of the Help to Buy scheme and of the London Build to rent market. He contributes to a monthly house price review for Acadata, is Chair of First Affordable, a ‘for profit’ housing association and a NED of Vida Home Loans, a challenger mortgage lender. He is a contributor to the annual UK Housing Review and is treasurer of the Housing Studies Charitable Trust.

He was previously Executive Director of the Intermediary Mortgage Lenders Association, Director of the Cambridge Centre for Housing and Planning Research, Deputy Director General of the Council of Mortgage Lenders and Professor of Housing at the University of Wales, Cardiff.   He has held numerous board appointments in the public and private sectors including the Housing Corporation, Tai Cymru, the National Housing and Planning Advice Unit and Kent Reliance Building Society.