Rent controls are coming to a house near you

With the Labour Party almost certain to win the next election, the likelihood of some form of rent control is almost certain.

Even the Tories are fully signed up and Mr Gove is waving it through. There are a lot of renters with votes deciding on it is apparently as challenging as getting them out of bed in the morning.

When Harold Wilson introduced rent controls in the 1970s, it didn’t end well. These draconian rules heavily favoured tenants, allowing them to appeal to the Rent Tribunal, which often set a ‘fair rent’ significantly lower than the initially agreed amount. 

And these rents often stuck. Decades later, there are still people living in nice flats in central London under the antiquated regime.

The result was a mad scramble. I was there. People queued outside the Evening Standard building to get the first edition of the paper with meagre supply of rental properties. They sold like hot cakes.

In turn, Landlords threw in the towel, vacating properties faster than you can say ‘fair rent’. This rigid control led to landlords pulling their properties from the market, creating a housing shortage. Has Mr Gove thought this through? I wonder.

Fast forward to the era of Mrs Thatcher, and suddenly the pendulum was swung in the  with removal of these controls.

It was a wild ride from one extreme to the other. Suddenly, tenants were being handed notices for ‘no fault’ evictions.

All this leaves us all wondering if there’s a magical middle ground – a ‘Third Way’, as someone once quipped.

Instead of reinventing the wheel, why not learn from more efficient policies in other countries? This might be the dash of sanity we need in our housing market madness.

Other European countries – and even those hot beds of capitalism New York and San Francisco – have some form of rent control.

Finding a balanced approach to housing policy is crucial for fair treatment of both tenants and landlords. 

Policymakers should create a system that tackles housing challenges without resorting to extreme measures.

Food for thought.

Have a good weekend.

Tom