Rent control: a landlord's guide

Rent control is one of the most contentious topics in British politics. The ongoing housing crisis has raised calls for radical solutions, and some form of rent control has been floated by people across the political spectrum.

But what is rent control, and what would it mean in practice?

What does rent control mean?

Rent control means the setting of maximum rents by central or local government, either by fixing an absolute cap on the amount that landlords can charge, or by limiting the amount by which rents can be increased over set periods.

Rent control has been brought back onto the agenda by the Labour Party, with leader Jeremy Corbyn suggesting at Conference that a Labour government “will control rents.”

But that’s a bit vague, and certainly doesn’t explain how rent control would work in practice. In fact, there are likely two different ways in which rent control might operate:

  1. Central or local government sets a cap on rent increases, such that landlords could only raise their rents by a certain percentage during each tenancy term. Another potential way to achieve this is by forcing longer tenancies, during each of which the rent is guaranteed.

  2. Central or local government setting the absolute rent according to space and location. Shelter, for example, envisage a situation in which landlords would not be legally able to charge more than £10 per square metre.

This choice is one of the main problems with the debate around rent control – nobody has made clear exactly which system is being discussed. This has led some commentators to back rent controls without explaining how it would work, and others to suggest that any rent control proposals are unacceptable.

What are the arguments for rent control?

Rent control has only recently returned to the top of the political agenda, and that’s because of the UK’s housing crisis. The private rented sector has boomed in recent years, but there are suggestions that tenants may not always get the best deal. Housing groups argue that tenancies are not secure enough, that rent is too high, that the quality of rental stock is too low, and that both landlords and letting agents are under-regulated.

This is compounded by ballooning property prices, which mean that renting for life looks like the only option for much of the generation who would now otherwise be looking to get on the property ladder. There is therefore a newfound appetite for wholesale reform of the PRS to address perceived imbalances that pressure groups say currently work in favour of landlords.

What are the arguments against rent control?

The arguments against rent control can broadly be split into two categories: those that say it is ideologically objectionable, and those that say it is bad not only for landlords but also for tenants.

Those in the camp of ideological opposition insist that the only way to guarantee fairness in the PRS is to let the market dictate the ceiling for prices. Tenants, they say, will pay as much as they are willing and no more, and state intervention on pricing will warp the market.

On the other hand, some commentators believe that rent controls as some understand them would actually be bad for tenants in the long-term.

Perhaps surprisingly, Shelter are among the organisations that have sounded a note of caution on absolute controls. They suggest that this would cause landlords to sell up, which would in fact reduce choice for those on lower incomes who would not be able to take advantage of new stock available to purchase.

Is rent control going to happen?

That depends entirely on the result of the next general election. It seems highly unlikely that a Conservative government would begin setting limits on rent, or give local authorities the power to do so.

However, Labour has already pledged that it would take some action to control spiraling rents – what form that action might take is yet to be seen.

Do you think rent control is a good or bad idea? Let us know in the comments.

Get set with tailored landlord cover

Over 100,000 UK landlord policies, a 9/10 customer rating and claims handled by an award-winning team. Looking to switch or start a new policy? Run a quick landlord insurance quote today.

Start your quote