Comment: It’s time for rent regulation to address our housing crisis

We don't have to choose between tenants' security and housing sector growth

 

News that the capital’s private sector rents have risen by 4.1 per cent this year will sadly not come as a huge surprise to most renting Londoners, who have become miserably accustomed to rent rises outstripping wage growth in recent years.

Despite that acceptance, private renters in the capital will undoubtedly be left reeling from this fresh hit on their disposable income. With rents soaring ever higher the spotlight should turn to the absence of safeguards to protect against the rocketing cost of renting in London.

There’s no getting away from the fact that London’s sky-high rents are mainly the result of a chronic shortage of housing. Ultimately the solution to unaffordable rents is to build more homes.

Yet even if we began a mass house building programme tomorrow, it would be years before the effects were felt in lower rents. In the meantime, something has to be done to help prevent rent rises that outstrip growth in wages.

Unfair rent rises and insecure tenancies afflict the lives of so many Londoners. Yet, for too long, opinion formers – most notably private landlords and some politicians – have perpetuated the fable that giving renters more security of tenure – through rent controls – poses a threat to the health of the Private Rented Sector (PRS).

For too long, we’ve have lacked the robust evidence needed to dispel this myth. That is, until now.

Recent findings from a report commissioned by the London Assembly Housing Committee reveal that under virtually every model of rent control, the PRS in the capital would still experience significant growth. This should reassure those who fear a sudden mass exodus of landlords from the market, and a resulting rise in homelessness.

It’s shameful that we have some of the weakest protection for private tenants in Western Europe. Renters can find themselves subjected to short-term tenancies, unpredictable rent rises, and eviction without cause.

In contrast, many of our European neighbours enjoy a more equal balance of power between landlord and tenant.

This balance often brings with it indefinite tenancies and caps on rent increases, and gives tenants the necessary powers to ensure their homes are properly maintained.

There has been a renewed and concerted effort to replicate that balance here in the UK. Earlier this month, Karen Buck MP’s private member’s bill, which sought to make it illegal for landlords to let out any property that is not fit for human inhabitation, was debated in the House of Commons.

Sadly it was talked out by a Tory MP, who is also a private landlord, before it could be voted on.

It is extraordinary that legislation of this kind does not already exist, and equally disturbing that some landlords remain unashamedly willing to rent a property in such a dire state, most often at the expense of vulnerable people.

Though most landlords do the right thing and ensure their tenants are housed well, it is the behaviour of their disreputable colleagues which has resulted in this refocus on improved protection and regulation.

A shift in the status quo will be met with alarm from some politicians and landlords, and the usual cries about Venezuelan-style rent control will, as always, be used to whip up fear of change. But this latest report suggests the panicked rhetoric may well be unfounded.

The report takes the forecasted growth in London’s PRS over the next ten years and examines the potential impact of six individual rent regulation models. Under all but the hardest model, the research predicts that the PRS would still grow between 35 per cent and 49 per cent during that period, in line with expectations that the sector in its current form will grow by 49 per cent.

We will, of course, continue to hear the scare stories from landlord associations about the horrors of a regulated sector. This research should calm the nerves of those who fear that rent control may have too many unintended consequences.

Those who continue to be plagued by doubts about the feasibility of this approach need only look so far as Germany, whose private rented sector is significantly bigger than our own while being subjected to comprehensive regulation.

Rent control is not a panacea, and ultimately we need a huge increase in house building. But for too long British governments have shied away from offering private tenants real protection against unfair rent rises, insecure tenancies and the threat of eviction without reason.

When you consider that almost a third of Londoners now rent privately, including a growing number of families with children, the current system of six-month to one-year tenancies as standard is neither suitable nor fair.

The data we now have suggests that under all but the most stringent rent control regimes the rental market in London would continue to grow significantly over the next decade. With this in mind, time is up on the old fable that you cannot offer tenants stability and security without causing a mass exodus from the market.

Tom Copley AM is Labour’s London Assembly Housing Spokesperson. Follow him @tomcopley

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