When the Housing Act 1988 came into force, it deregulated the market and allowed the decision on rental cost to be a matter between property owner and their prospective tenant(s). In recent years there have been deep concerns expressed over whether the cost of rental is fair in some areas. At the beginning of February, the UK government published a new discussion research document.The long-running saga of rent controls is once again on the government’s agenda.
Rent Stabilisation vs Control
In some areas of the country, rent prices are out of control with some considered unaffordable for the average person. All major parties pledged to look at the issue as part of their election manifestos in both 2015 and 2017. It seems that the current situation of the “invisible hand of the market” is failing, which is why the government is looking at ways of changing how the process works.
While some have called for full rent regulation from the government, what is being proposed is more like a system of stabilisation. Rather than setting a maximum cap on the rent that a property owner may charge, a stabilisation system determines the maximum amount by which rent can go up per year.
What’s in the Government’s Research Paper?
The paper’s authors spent time researching some of the systems already in place around the world, both concerning rent control and rent stabilisation. Most notably, Scotland and Wales introduced systems of rent control recently as devolved issues; they have worked well. It also considers EU members Germany, Sweden and France. It’s important to note that renting is much more common on the continent than in the UK.
- A number of rent control and stabilisation proposals, comparing New York to schemes in place in multiple EU member states
- Historic rent control methods from the UK in the Victorian era and turn of the century where due consideration was given to both landlord need and tenant affordability
- Details of arguments of those against rent controls, including all the rebuttal arguments presented by those in favour, including evidence from those countries already discussed
It was not the remit of the paper’s authors to come up with solutions. As this is a research document, it was designed to present all evidence on both sides for an informed decision for Parliament.
The State of the Student Market
The student population comprises approximately 1% of the private rented sector. However, this does not include the newer custom build properties built by universities as student communities. There is little research overall for how rents in the general market is impacting the student market. Yet the skewed demand and rental rates in London are generally reflected in the student market as is the enormous disparity between the capital and the regions.