Why aren't we talking about rent controls?

Ruby Hinchliffe

Ruby Hinchliffe

It's no secret my generation is facing one long, uphill battle when it comes to mortgage interest rates.

For many, nauseating house prices are enough to knock would-be first-time-buyers out of the homeownership race. For others, it has been the successive base rate rises triggered by the Bank of England since December.

Interest rates have more than doubled since the historic, sub-1 per cent rates of October, and according to experts they are only going to continue to rise.

Renting for life, whether we like it or not, is quickly becoming a reality in the UK. More recently, this has been intensified by how difficult it is to save in the face of food prices the central bank governor himself has called "apocalyptic".

Tory MPs can continue to tell people they need to learn how to cook in order to resist falling into poverty during this living cost crisis, but the mess we're in is far more systemic than mastering the basics of a chilli con carne.

If renting is the UK's future, then we need to talk about rental controls. Labour's talk of further taxation on landlords would only drive rents up further. A cap on rent, a limit on rental increases or a temporary freeze on rents could all prevent this.

I'm all for taxing buy-to-let investors with hefty portfolios worth millions, but let's not do it to the detriment of those who will suffer by proportion the most – their tenants.

Sadiq Khan has floated the idea of rental controls in London before, but many worry a cap of any kind could deter owners from letting their properties. 

What could rent controls look like? Perhaps it's helpful to look to Berlin, a city that enacted a rent cap in January 2020. Designed to be in place for five years, the cap was supposed to cool rising rents and keep Berlin an affordable place to live.

Just over a year later, however, this was overruled by a federal court which found Berlin should not have acted alone in setting this rule. It saw tenants forced to pay back their landlords, in some cases thousands of euros. There is now a nationwide movement for a federal rent cap.

The cap had ruled that, depending on location and upkeep, any rents that were 20 per cent above acceptable levels should be reduced, and that rents agreed in June 2019 could not be increased by owners of flats built before 2014. 

Professors have highlighted how the crude rent ceilings implemented after the Second World War are a far cry from the contemporary rent controls at governments' disposals today.

Instead, they argue a flexible rent cap can counterbalance gentrification, curb homelessness, and "mediate the severe power imbalance between tenants and landlords".