Introduce rent controls to save tenants and taxpayers money, says think-tank

2nd January 2015

img

Tenants should be allowed to stay in rented accommodation for as long as they need with their rent capped in line with inflation, a think-tank has said.

 

Think-tank Civitas has expressed concern about rising rents and said action needs to be taken to help tenants as the private rental sector grows.

 

By 2032 the private rental sector will account for more than one third of UK housing stock as buying a home is pushed further out of reach for many.

 

Civitas said that on average renters spend 40% of their income on their rent and there are fears that this proportion will grow as landlords take advantage of a housing shortage to push up rents.

 

In order to combat the problem Civitas has called for a new regulatory regime that would give tenants the right to stay in their home for as long as they want and guarantee that their rent would not be increased above the level of inflation.

 

Author of the report Daniel Bentley said: ‘As private renting grows it is important to ensure that it offers a fair deal to those who have little choice but to rely on it.’

 

Housing minister Brandon Lewis said that rents have fallen in real terms every year since 2010 but that more needed to be done to ‘create a bigger better private rented sector’.

 

‘The last thing we want to do is introduce new rent controls, which in the past led the private sector to shrink dramatically, reducing the choice for tenants,’ he said.

 

While Civitas’ recommendations may concern landlords it believes the plan would save taxpayers money.

 

The level of housing benefit paid out increased to £9.5 billion last year and Bentley said a ‘vicious cycle’ is being created where low income households claiming benefits in popular areas are propping up rent inflation by distorting the market.

 

 

 

2 thoughts on “Introduce rent controls to save tenants and taxpayers money, says think-tank”

  1. Noo 2 Economics says:

    “…a ‘vicious cycle’ is being created where low income households claiming
    benefits in popular areas are propping up rent inflation by distorting
    the market.” Quite right, I know a landlord who deliberately targets social security recipients via the types of properties he buys to rent and sifting out non social security recipients at application stage. He knows all the rules on the minimum he has to do with a house to extract the maximum rent/housing benefit from the Local Authority.

    Effectively, he makes his living exclusively from public funds although his business is counted as part of the private sector. If Housing benefit were to stop his mini empire would collapse in a matter of weeks.

    The problem with rent freezes is that it would drive landlords out as they pay higher prices for property but are not allowed to increase their chargeable rents to cover the cost of the extra money borrowed.

    A serious approach would have to include house price freezes too which I for one, as a home owner, would have no problem with, but then, I bought my house to live in, not to make money on.

  2. David Lilley says:

    Housing Benefit is more than £9.5b, its £23.8b.

    Housing Benefit

    From Wikipedia, the free encyclopedia

    “Housing Benefit is a means tested social security benefit in the UK that is intended to help meet housing costs for rented accommodation. It is the second biggest cost for the taxpayer, totalling £23.8billion in 2013-14 – almost 30% of the entire welfare bill.[1]”

    Wikipedi is also wrong. Housing benefit is not the biggest cost to the taxpayer when total gov spend is £739b.

Leave a Reply

Your email address will not be published. Required fields are marked *