to let

04 Apr 24

A think tank based in central London says landlords would not quit the sector if much tougher – and more expensive – reforms were made to the private rental sector.

The Social Market Foundation think tank claims that fears that stricter regulations will reduce the supply of rental properties are “overblown.”

The SMF says that compared to similar countries, English rental contracts tend to be relatively short and most comparable countries have ditched ‘no fault’ evictions, if they ever had them. And it claims English landlords wouldn’t suffer if the same measures were introduced as in those other countries.

So for example it says that Scotland, which banned no fault evictions in 2017, has not seen a significant drop off in rental supply, and instead has seen the number of households in the private rented sector increase. And in Australia the introduction of greater regulation of tenancies, and protections for renters, has not had an impact on total supply levels.

The SMF does not give any other international examples of such eviction bans.

But it adds that outside England, longer tenancies are much more common, and Scotland and the Republic of Ireland have both adopted indefinite tenancies. 

“In Ireland, the policy does not seem to have affected housing supply, despite the warnings of landlords: since the initial legislation was passed in 2004, the private rented sector has doubled in size” it says. .

The paper also looks at the controversial issue of rent controls, introduced by the Scottish Government amidst the cost of living crisis, and favoured by London Labour Mayor Sadiq Khan, but opposed by the Labour Party nationally.

The SMF claims rent controls are “widespread across Europe, and have more mixed results than the textbooks would suggest.”

It says rent price regulations – ranging from rent freezes to simply limiting increases on existing tenancies – generally reduce costs for tenants already in housing, but the effect on the availability of properties varies by context.

So for example in Berlin where there is a rent freeze, and San Francisco, where rents are capped at 60% of the rate of inflation, there has been a shortage of properties.

But the SMF insists there has been no impact on supply in the Republic of Ireland, where there are ‘rent pressure zones’, have not had a demonstrable negative effect on supply – although the think tank admits that on this “more research is needed.”   

As well as abolishing no fault evictions and moving to rolling tenancies, the SMF recommends strengthening the rent dispute system to make it easier to use. 

Whereas in England, depending on the complaint, responsibility may lie with the housing ombudsman, local authorities or courts, it’s different elsewhere: in Australia, New Zealand, Ireland and many Canadian provinces there are ‘lead agencies’ that are a first port of call. 

Additionally, the think tanks recommends  licensing and registering landlords, as is the case in the rest of the UK and Ireland – or creating a non-compliance register, as in Victoria, Australia.

 Niamh O Regan of the SMF comments“English renters get a bad deal, certainly compared to their counterparts in other countries. Fixed term tenancies are too short, and no-fault evictions make periodic tenancies too risky. What’s more, cash-strapped councils and fragmented dispute resolution services are unable to consistently guarantee minimum standards, allowing bad landlords to continue to operate. Longer tenancies and stronger protections for tenants would alleviate some of the pressures they face and make long term renting a more attractive proposition – which it needs to be, given many of us are likely to be renting for much longer in future.”

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