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About-turn as Shelter now says No to 'hard' rent controls

Campaigning charity Shelter appears for the first time to have acnowledged that rent caps may backfire and end up harming tenants rather than helping them.

The charity - which in the past has given the appearance of supporting extensive controls on rent levels - now says that ‘blunt’ rent caps could force landlords out of the market and make life harder for tenants . 

In a report commissioned by the charity and publicised by The Guardian, researchers from the University of Cambridge have warned that so-called “hard rent controls” would remove landlords’ financial incentive to invest in their properties, and lead to poorer quality homes.

The Guardian says that a survey of landlords carried out by the university revealed that 31 per cent said they would sell all or some of their properties immediately if rents were frozen, meaning less choice for those in the private rented sector and the prospect of a rental black market not subject to rent regulation.

“In practice, hard rent controls tend to create a two tier system in which some homes are subject to rent caps, while a formal or informal unregulated sector emerges that houses those in most need who do not benefit from the caps,” the report said.

The report advocates that instead of a cap there should be longer-term standard tenancies - of up to five years - with rent rises limited to inflation. 

“Our first priority is tenants. That’s why although many have called for rent caps as the solution, we have found that this could add fuel to the fire by pushing landlords out of the market and making it even harder for renters to find a home they can afford” admits Shelter’s chief executive, Campbell Robb. 

“This research is further proof that the government should give renters the stability they need to put down roots and save for their future by introducing longer-term tenancies with rent increases that can’t go above inflation” he says.

  • Simon shinerock

    I have not read the report but it sounds pretty moronic. Saying 'rent caps don't work' is like saying 'water runs downhill' the point of the report seems to be aimed at reinforcing Shelters aim to force 5 year tenancies onto the market and to allow tenants to keep pets and redecorate without the landlords permission. As is usual with left wing organisations they think they no better and want to cure the imaginary problem of 'revenge evictions'. Their approach is based on the Spanish system which was so successful it saw the PRS diminish from over 20% to under 6% of households after inception. I believe Shelter also wants to copy the Greek Benefits system and Italian tank design.

  • icon

    Well it seems more like a thinly-veiled nudge rather than a u-turn, as Simon suggests. I didn't ever think I'd hear anyone from Shelter say "we have found that this could add fuel to the fire by pushing landlords out of the market and making it even harder for renters to find a home they can afford"

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    Shelter has alienated itself from landlords, agents and surely this will alienate them from some tenants? Strange move.

  • John Boyle

    Up here in Scotland, rent controls/caps are being consulted on with a decision due in the Autumn. The type of rent cap being asked for by Shelter would actually have seen rents HIGHER in Scotland over much of the last decade. Landlords want/need the flexibility to lower or raise rents according to market conditions, which is what they have been doing. There is little justification for crude and heavy handed intervention where markets are self-adjusting.

  • icon

    Astutely put, John. Our biggest problem is getting balanced and knowledgeable messages like yours out there rather than a lot of the propaganda we usually see in the mainstream media...

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