With Private Rent Controls being banded around as the solution to Britain’s “housing crisis” we look at What Rent Controls are and whether there is any benefit to Tenants of such actions.
Rent Controls are a limit on initial asking rent or rental increases by the government and local authorities. They are not a new idea, in fact, some might see rent control as an old-fashioned solution to a modern problem, historically, rent controls were in place across England for much of the 20th century, from the First World War until 1988. And some larger European cities have a similar rent control system banning rent increases of 10% more than the local average
In England during the 20th Century rent control period, private rented housing reduced from 90% to 10%, with rent controls being considered a factor in this decline. Now, with 20% of UK households in rental accommodation currently, perhaps rent control once again seems appealing.
However, some housing charities believe this will cause landlords to sell up or underinvest in homes, leading to poor conditions. Therefore, they are proposing a cap on rent increases during the tenancy and offering longer tenancies to provide more stability. Whilst initially this may come as a welcome solution to “generation rent” who are dealing with increased rents, longer commutes and insecure rental accommodation there could well be an impact on Landlord’s ability to invest in rental property maintenance and improvement.
Ultimately, it is hard to predict what effect Rent Controls could have on the Housing Market: yet it seems another cruel blow to buy-to-let investor landlords who are already affected by higher stamp duty costs, tougher lending rules and shrinking tax relief on mortgage interest and to Letting Agents who are already facing cuts in Tenant Fees and stricter regulation in the forthcoming years.
If you’re looking to rent out your property in Leamington Spa or the Warwickshire area, then get in touch today to find out more 01926 88 88 44 or email leamington@crabbcurtis.co.uk