Councils and governments in the UK should reject the first generation of hard rent controls in favour of its more moderate iterations, academics have warned.
The UK Collaborative Centre for Housing Evidence acknowledges that rent control is attractive because it is relatively fast-acting compared with policies such as building new affordable homes.
It’s also a high-profile policy that acts directly on the issue and doesn’t involve a greater commitment of public resources.
Its new report on rent controls reveals how a combination of rent stabilisation along with stronger tenancy conditions can make a modest positive contribution.
But the authors say: “We concur with the overwhelming majority of studies that conclude that first-generation rent regulations should be avoided.”
Freezes, caps and resets
They explain how first-generation rent control refers to nominal ‘rent freezes’, while the second generation allows rental adjustments to reflect changing market conditions, cost inflation, or the costs of refurbishment, and are also known as rent regulation.
Some approaches do no more than cap ‘excess’ rent increases to smooth rent inflation and prevent landlords from capitalising in the short term on sharp shifts in demand or supply, and are also known as rent stabilization.
Third generation rent control, or so-called tenancy rent control, is when rents are simply ‘reset’ at market levels between tenancies.
Political
The report says that changes towards (de)regulation have always been political and that this political battle is fought at different levels – either through political parties or vested interest groups – and through very different means, such as election campaigns or in the media.
It concludes that the question of how to ensure access to a decent, secure and affordable home regardless of tenure should be part of a national conversation that permits rather than represses political contestation and struggle.
It adds: “Strong rent control measures may be advocated within the political process, but policymakers should assess their wider costs and undertake due diligence about implementation before heading down that track.”
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