What might rental regulation look like?

Eric Pickles has indicated his opposition to rent controls and landlord registration.

Speaking in Parliament last week the Communities and Local Government Secretary suggested that further regulation of the private rented sector could lead to a reduction in the provision of rented accommodation, but added that the government still intends to introduce a code of practice for landlords.

Mr Pickles’ speech is at odds with increasingly widespread calls for more dramatic regulation of the sector. As rents continue to beat previous record highs, housing groups are issuing ever starker calls for intervention to ensure that housing is affordable.

Labour has also indicated that it would introduce tighter controls in the event that it wins the next election. In July a Labour policy review insisted that “everyone should have a home at a price they can afford.” But what form might that regulation take?

What might regulation look like?

There are two key planks of potential rental regulation: a register of landlords, and rent controls.

Landlord registration is already a reality in Scotland, and certain councils across England are experimenting with the idea. In Scotland, landlords are required to register through a central portal which allows them to seek accreditation from all of the country’s local authorities.

It is thought that a registration scheme in England would work similarly, although some have suggested that registration should be handled by individual councils rather than through a central destination. Landlords would likely be required to sign up to a code of practice before receiving accreditation, and they would probably have to prove in some way that they can be considered a ‘fit and proper person’. Some have also called for compulsory training for prospective landlords, and for ongoing, regular ‘top up’ classes for those who have been accredited.

Rent controls are more contentious. There are growing calls for some government intervention in the rental market, particularly in London where rents are rising very rapidly. One of the more radical suggestions is that rents should be capped at a specific proportion of the average salary, while others insist that landlords should only be allowed to raise rents in line with inflation.

The UK has previously experimented with rent regulation. Prior to January 1989 many properties were offered under regulated tenancy agreements. In these arrangements landlords could normally only increase rents every two years, and then only by an amount calculated according to a specific formula. In 2011 then London Mayor Ken Livingstone indicated that he wished to implement a rent cap, and it was generally thought at the time that he wished to see a return to these regulated rent arrangements.