Will rent controls be introduced in Britain?
Reports are growing once again on the topic of introducing rent controls in England, Scotland, and Wales. Here's an overview of how things stand and what the next steps may be.
The threat of rent controls being introduced is a mainstay in lettings news, with new claims that the concept is gaining traction once again. A recent article even speculated on whether the Renters' Reform Bill was a "Trojan Horse", masking the impending introduction of rent controls.
Generally speaking, when rent caps aren't in place, landlords are only allowed to increase rents in line with average local rents. When average rents rise rapidly across the UK, that's when calls for rent controls grow. The question is - how close are we to them actually becoming a reality?
The current rent cap system in Scotland
Let's take a look at the facts. In Scotland, Rent Pressure Zones already exist. They can be introduced for areas where rents are rising too much and too fast in the private rented sector, causing problems for tenants.
An Rent Pressure Zone sets a cap - up to one percent above inflation - for how much rent can increase for existing tenants in a particular area each year. However, there are currently no Rent Pressure Zones in place in Scotland.
A Scottish consultation on a new deal for tenants
Despite this, Scotland is consulting on its "A New Deal for Tenants", which includes a proposal for introducing national rent controls by 2025 as part of its plans to improve standards and affordability in the private rented sector.
Its first goal is to consult on the principle of rent controls in Scotland; in other words, whether it's the right choice and worth pursuing as a solution to make rents more affordable.
That consultation closed in April 2022. The next step would be to consult on how to implement it, if it's indeed found to be the right vehicle to achieve this goal.
A motion to introduce Welsh rent controls
In Wales, a motion to introduce rent caps was recently made in the Senedd, but it was rejected, with many Labour party members abstaining from the vote.
The rejection of the notion spurred a flurry of comments on how the debate was handled, with Deputy climate change minister Lee Waters saying the topic was raised to simply "get social media likes".
However, this may simply be a bump in the road for advocates of rent controls in Wales.
A white paper on the cards in Wales
In 2021, two leading political parties joined forces in 2021 to create the Labour/Plaid Co-Operation Deal, which agrees to put forward a policy for nationwide rent caps and pledges to produce a white paper on the topic.
"The lessons for Wales are clear from Scotland’s failure: we need one national scheme, we need to reduce the administrative burden on local government, and controls must be linked to the property, not the tenant," says Carolyn Thomas, Labour's North Wales MS - who labelled the PRZs in Scotland "timid".
What's currently unclear is when the white paper will be published. With the recent motion dismissed, supporters of rent controls will need to build a larger following if they want to advance their campaign in the short term.
Regional proposals in England
In England, there are no rent controls in place - but Bristol is pushing for them independently, with a "Renting Summit" on 2 March, led by the city council.
“Piloting rent control in Bristol will allow us to take a step towards tackling our local renting crisis and will help us develop learnings and that can inform wider positive change for the rest of the city,” says Bristol's Mayor, Marvin Rees.
If Bristol is successful in its appeals for rent controls in the city, this is likely to accelerate similar demands elsewhere, with Bristol's win serving as ammunition in support of controls.
Sadiq Khan's rent control campaign
Sadiq Khan has pushed rent controls as key part of his agenda as London mayor for a number of years, so Bristol may find that it's disappointed - but Khan has recently doubled down on his proposals, calling for a two-year freeze on rents in the capital.
He emphasises the consequences of “poor housing conditions and exploitative rents" on the "physical and mental health of tenants", and highlights the impact of the rising cost of living on tenants. More regional voices joining the chorus of calls for controls may strengthen his case.
The pushback against rent caps
While appeals for rent caps may be growing across all three British nations, there is still an equal amount of pushback.
The top arguments against rent caps in the UK are consistent across most stakeholders - namely that, while rent controls can help make renting affordable for tenants initially, they will also make being a landlord unaffordable.
With NRLA research finding that more than half of private landlords in the UK lost income too during the pandemic, property website Home predicts that, with rent controls, “landlords would likely exit or switch to Airbnb-style letting."
Tenants would find slim pickings for rental properties - swapping the problem of affordability with another, long-term issue.
Tenants in support of rent controls
However, unsurprisingly, British tenants are all for introducing rent caps. A recent YouGov survey found that 67% of private renters would welcome them.
All this suggests that, while UK rent controls are being seriously considered in a number of influential arenas, they are not on the doorstep.
With white papers or consultations promised in two out of the three nations, the results of these will give an indication of the overarching sentiment from all stakeholders - and how likely the introduction of rent controls will be in the near future.