A housing affordability crisis is gripping England as rent prices outstrip wage growth for millions of households. With a new Prime Minister on the horizon, a coalition of housing campaigners is urging urgent action to introduce rent controls across the country. The Renters' Reform Coalition argues that capping rents is essential to tackle the cost-of-living crisis and make housing more affordable.
Clara Collingwood, Director at the Renters' Reform Coalition, warns that without regulation, 'you're trying to fill a leaking bucket'. She points out that rent has surged ahead of wages in 11 out of the last 15 years. Unaffordable rents exacerbate poverty and homelessness, placing significant financial burdens on local councils and the government.
The coalition cites analysis by the Joseph Rowntree Foundation (JRF), which suggests that a rent cap could save renting households almost £1200 per year within four years. Crucially, such a policy could also enable the government to increase housing benefit annually while reducing its overall cost by more than £600 million over the same period.
However, not everyone agrees on the merits of rent controls. The Institute of Economic Affairs (IEA) warns that while they may offer initial relief, they can lead to unintended negative consequences like higher rents in unregulated sectors and a decline in housing quality. Scotland's recent experience with a rent cap has also raised concerns, as data from Hamptons shows Scottish rents have surged by 11.6% since its introduction.
David Fell, lead analyst at Hamptons, suggests that rent controls in Scotland have driven landlords to increase rents more frequently to mitigate future uncertainties and maintain market rates. Critics argue that this evidence demonstrates the potential failure of such policies to achieve their intended goals and worsen the housing crisis instead.