Assessing the evidence on Rent Control from an International Perspective
This short independent review was undertaken by the authors at the request of the Residential Landlords Association (RLA). The context of this report is the more than doubling of the size of the private rented sector since the turn of the century, the increasing tensions around affordability and the evidence in other countries. The study was focussed on a review of the different approaches to rent control; an assessment of the current body of academic and other relevant literature; and a comparison of international examples of rent controls with the aim of making policy recommendations to the RLA.
In undertaking the research we began with a typology of rent controls and related regulatory requirements; we then undertook a focussed literature review covering academic and policy debates in the UK and abroad covering rent control and wider regulation of the private rented sector as well as evidence of changes over time; we consulted with experts from a number of countries with widely different experience of rent control; and we hosted a roundtable for invited experts, practitioners and policymakers with specialist knowledge of the private rented sector (PRS). Our country updates highlight the fact that regulation of the PRS is a live issue in many countries. This is mainly a result of rapidly growing private rented sectors in pressured housing markets.
In some countries, notably Germany, France and Ireland, policies have been introduced to tighten the regulatory and rent determination regimes. An important element has been the identification of pressure zones where rent controls have been tightened considerably. Overall, therefore what had been a fairly clear trajectory towards liberalisation appears to have been revered to limit rent increases as a result of political pressures in the face of market pressures. The discussion at the expert roundtable gave a clear sense that a broad consensus existed around a number of key elements in the debate. These included:
- Rogue/criminal landlords give mainstream landlords a bad name. There should, therefore, be stronger enforcement by local authorities.
- Many landlords would be happy to offer longer-term security, as long as enforcement procedures are working properly,
- Landlords remain concerned about indefinite security especially if clear-cut exemptions are not in place. They see the way forward more about enabling a range of tenancy models which landlords can choose to provide.
- There are other pressures building up, including short-term lettings; the lack of housing for poorer households; cutbacks in housing benefits; and changes in the welfare system more generally; and increases in property taxation which impacts on a sustainable PRS.
- More evidence both on what is wanted and what has been the impact of regulatory change is needed,
- The sector needs to be responsive to the changing political mood with the objective of developing a modern private rented sector which meets the diversity of demand by a wider range of provision.
We conclude that the PRS is a crucial part of the solution to UK housing problems and this requires a more positive stance towards the sector. The focus for reform should be on putting in place a system which allows longer term tenancies (for those that want/desire them), alongside a much better enforcement system which tackles both poor tenants and landlords.
The views expressed in this report are those of the authors and do not necessarily reflect those of the Residential Landlords Association.
Assessing the evidence on Rent Control from an International Perspective