Alan Ward: Rent controls would only plaster over the cracks

Written by RLA

RLA Chairman Alan Ward has written an opinion piece in today’s Guardian newspaper on the topic of rent controls in the nation’s capital…

RLA Chairman Alan Ward has written an opinion piece in today’s Guardian newspaper on the topic of rent controls.

Alan said that ‘Rent controls would only plaster over the cracks’, and fears that disinvestment and the creation of slums and ghettos are inevitable with limited choice that would be created for tenants through rent controls.

Below is Alan’s full thoughts on the matter:

“The arguments for rent controls are superficially attractive. The reality however is that such a solution amounts to a short sighted, political sticking plaster that would lead to widespread disinvestment and the creation of ghettos of slum housing within 10 years. The London-centric calls for such controls ignores the evidence that controlling market rents would choke off investment in much needed new homes and reduce the choice tenants have over their housing needs.

If letting agencies are to be believed, rents are now at a record high and unaffordable for many people. But they would say that wouldn’t they? After all, it is in their interests to puff up how much they can get for their landlord clients.

The reality, however, is that in most of the UK rents have actually fallen in real terms. In June, the Office for National Statistics published statistics that found between May 2005 and May 2013, private rental prices increased by 8.4% in England overall and 11% in London. Inflation, meanwhile, increased by 30.2% over the same period. All of a sudden the argument that landlords are somehow profiteering does not seem quite as convincing.

Where high rents exist, such as in London, it is a result of landlords responding to market pressures. Rent controls would amount to treating only a symptom of the problem, namely the chronic shortage of properties to rent.

We have published a detailed manifesto outlining how best to support the almost 90% of landlords in England who, as individuals, rent just one or two properties out, to increase the supply of new homes available. Where is the plan for growth in the private rented sector from those calling for rent controls?

If those advocating rent controls are as committed to housing growth as they claim to be, it is time they come clean on the devastating impact that such controls would have on much-needed investment in new homes. As former housing minister Grant Shapps said: “Rent controls resulted in the size of the private rented sector shrinking from 55% of households in 1939 to just 8% in the late 1980s.” Is that what proponents of rent control really want to see? Tenants denied choices over their housing needs and reduced incentives for landlords to compete on quality, service and cost.

It is little wonder that the cross-party select committee into the private rented sector concluded: “Rent control would serve only to reduce investment in the sector at a time when it is most needed. We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest.”

Rent controls would lessen investment in new homes when we need more and serve only to paper over cracks in the market. As with so much in the housing world, for some, it is far easier to achieve a cheap political point by calling for rent controls than to provide a detailed prescription for growth in the private rented sector. And ultimately tenants would lose out as they find themselves forced into slum properties rented by Rachman landlords, operating outside the legal market.”

This article originally featured in the Guardian on the 5th of August 2013.

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The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.


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