The issue of rent control has come up in the news recently. The Scottish Government proposed new measures to improve the lives of Scotland’s tenants which included limiting rent prices. In addition, the Green Party said that it would give local councils in England the opportunity to limit the costs of renting. But could rent control happen across the UK and would it work?
What is rent control?
Rent control, also known as rent regulation, is a system that restricts what landlords can charge for their properties, the maximum amount they can increase the rent over the course of a tenancy or a limit on how often they can raise the rent. A local authority, council, or national body makes the ruling, which either applies rental caps uniformly or based on the size of the property.
Where does it exist?
Scotland already has some existing legislation that limits rental increases to once per year and requires three months’ notice, with tenants having the right to challenge unfair rent rises.
But it is more evident in other parts of the world, such as Ireland and Catalonia, Spain. In Ireland, Rent Pressure Zones benefit from annual rent increases that remain in line with the rate of inflation or 2% a year, whichever is lower.
In Catalonia, a 2020 law sets maximum rent prices in places where rent makes up more than 30% of the average household income.
New York City is another famous example of a city that enforces rent control on certain types of properties. It was even used as a plot point in the sitcom Friends to explain how Monica could afford such a big apartment in Manhattan.
How would it benefit families?
Rent control reduces the chances of a family’s home becoming unaffordable and necessitating them to move. This means that children can stay within communities where their friends live and continue to attend the same school without disruption.
Being able to predict when and how much your rent will increase helps parents budget accordingly. There is no big shock as a landlord suddenly boosts the monthly price on a whim and with no warning.
Will it happen?
It is unlikely that rent control will become policy across the whole UK. With the current pro-deregulation government in England, rent control is not a priority. However, given rising household bills and financial pressures on families, one cannot rule out the possibility entirely. However, in the devolved nations, there is a possibility that families will gain some peace of mind with controlled rents. That is if the assemblies can get the policy past landlords.
0 Comments