Could We See Rent Control in the UK?

The Scottish Government has issued a consultation on a set of new measures it says will “improve the lives of Scotland’s tenants.” Among the many elements of the New Deal For Tenants consultation paper, the government has suggested giving tenants more say over personalising their homes and keeping pets, as well as creating new minimum energy efficiency standards. However, one controversial suggestion is the implementation of rent control in the private rental sector (PRS). But what is rent control, could we see rent control in the UK and would it work? This article explores this topic.

What is Rent Control?

Rent control sometimes called rent regulation, is the system by which landlords and letting agents are prescribed a maximum possible rental value for their property. A city authority, council or country can lay down laws providing rental caps, either in a blanket manner or depending on the size of the property in question.

In addition, these controls can dictate how much the landlord can increase the rent in a certain timeframe, as well as limiting how many times they can issue a rental increase.

New York City famously runs rent controls on certain types of property within the city.

Could There Be Rent Control in Scotland?

The consultation paper says “to ensure we can progress a meaningful right to an adequate home we must ensure rented homes are affordable. To tackle high rents in the Private Rented Sector we have committed to implementing an effective national system of rent controls by 2025.”

The government, on the advice of both tenants’ and landlords’ groups, has committed to collecting in-depth data on the affordability of renting in Scotland before providing any solid plans for the scheme. A working group will report back in March 2022 on the best methods to complete this.

There is already existing legislation in Scotland that provides some control over rents. The Private Residential Tenancy limits increase to once per year, with a requirement for three months’ notice. Tenants also have the right to challenge rental rises they deem to be unfair.

Reaction from lettings experts has been negative following the launch of the paper. David Alexander of letting agent DJ Alexander warned the government against “demonising the PRS,” claiming it “will not resolve Scotland’s housing problems and, if anything, it is likely to make it worse. The private rented sector is an essential part of housing provision in Scotland.”

Examples of Rent Control Around the World

In Ireland, there are Rent Pressure Zones, where rents are highest and are rising quickly. Within these zones, there is rent control that caps annual rent increases in line with the rate of general inflation or 2% a year, whichever is lower. A similar scheme is already in place in Scotland but has so far failed to make any impact. This is due in part to a lack of necessary data.

In Catalonia, Spain, there was a rent control law passed in 2020. It allows the setting of maximum rent prices in places where the market is said to be “under stress”. This includes areas where rent makes up more than 30% of the average household income.

Could We See Rent Control in the UK as a whole?

Although regulation might become a reality in Scotland, we might not see rent control in the UK as a whole. There was rent control in the United Kingdom up until the Housing Act 1980 when the Conservative government brought it to a close. As England currently has a pro-deregulation Conservative government, it would seem unlikely that rent control would be on their radar any time soon.

However, with household bills rising and families feeling the squeeze, you can never rule anything out completely.

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This article was originally published by Executive Property Management here