A cap on private rent seems like a no-brainer as after decades of council home sell-offs and an exponentially growing population – but a cap is not the real fix. Private landlords have failed to self-regulate since the early ‘90s.
It has fallen on the hard work of campaigners, to fight for an end to no-fault evictions and push for reform. But although improvements are being made – including changes to what letting agents can and can’t charge for – the fundamental issue is that housing is in such short supply.
Landlords in Southwark can charge sky-high rents and benefit from reinvesting in a property likely to only increase in value, while residents are left unable to save enough money to pay for a mortgage.
Some cities have introduced rent caps, many with similar issues of prime real estate, a shortage of affordable housing, and stock lost to AirBnB holiday rentals.
Rent is generally considered “affordable” if it is no more than 30 per cent of the tenant’s income.
Studies show young people in particular, who are most likely to rent in the first place, are spending more than half their income on rent in London. Rent controls are not new to London – or England – and were in place for decades. Although bad and expensive housing existed, as did unscrupulous landlords, it wasn’t until 1989 that the private sector was given a free rein on setting rents.
Paris, New York, and Berlin all have, or are close to having, rent caps implemented. However there are concerns reform could have the unintended consequences of owners selling off their property, and taking it off the rental market, and those unable to cover their own costly buy-to-let mortgages.
When we have so many people on the council’s housing waiting list, many forced to live further out of London, and thousands in temporary emergency accommodation, the private sector should be controlled as much as possible. But it’s new council homes that will make the biggest difference.
