Government restates opposition to rent controls in clear split with Greens
Greens and Labour clash over rent policy, with Housing Minister Matthew Pennycook claiming caps would make life more difficult for renters.
The Government has restated its opposition to rent controls, opening up a clear policy divide with the Green Party ahead of May’s local elections.
Housing minister Matthew Pennycook (pictured) told Parliament: “The Government does not support the introduction of rent controls, which we believe could make life more difficult for renters.”
Detrimental impact
He pointed out that: “There is sufficient international evidence from countries such as Sweden and Germany, and from individual cities such as San Francisco, as well as the recent Scottish experience, to attest to the potential detrimental impacts of rent controls on tenants.”
He then added that he had reviewed “a wealth of evidence” on both direct and indirect forms of rent regulation, warning that such measures “typically benefit settled and better-off tenants more than those looking for a home or needing to move”.
The Green Party, led by Zack Polanski, has made rent controls a central part of its campaign, arguing caps are needed to curb rising costs.
According to Polanski, renters are “stuck in an over-inflated market where landlords can often charge what they want”, and the party has pledged to give local authorities powers to introduce caps as well as pursue a national system if in government.
Pressure to introduce rent caps has also come from within Labour itself, with Dan Carden MP urging ministers to “look again at the evidence and start to consult”.
It’s good to see continued support from the UK Government for common sense.”
Kurt Mueller, Director of Corporate Affairs at Grainger, Britain’s largest listed private landlord, however, endorsed Labour’s approach, telling Housing Today: “It’s good to see continued support from the UK Government for common sense with their steadfast commitment against rent controls and the damaging impact they would have for renters and the market generally.”
What a shame. I thought that Zack might be a bit of fresh air, an honest politician, but he’s already gone down the path of popular politics that can’t work just to get the tenant vote.
He has previously posted that he would have capped rents in 2022. 2022, the year that the Bank Of England base rate went from 0.25% to 3.5%, ending up at a peak of 4.25%. The end of a 13 year low interest era. Mortgage rates going from 2.5% to 5.5% adding potentially an extra £6000 a year in costs on £200k of capital. This is not a story of greedy landlords, this is a story of landlords passing on some of the extra costs at a time when their own home is costing a lot more as well.
Allow free market conditions to set rents. Simple stuff. What the government should be doing to helping renters get into home ownership. This will reduce their income pressure on the rental market and rents will come into line with demand. If the govt indemnified the top 5% of 100% mortgages so more FTB’s could buy the first home. They could charge a nominal fee for the policy of say £150 thereby generating income, and would only have to pay out if the property was repossessed and had decreased in value by more than 5%. If the introduced this scheme ad infinitum it would stimulate the flat market for both new and secondhand homes and would help to get the whole market moving again. This in turn would stem the tide of reducing values. The residential housing stock in UK is close to £10 trillion! If it goes up by 10% that’s £1trillion of tax free unearned income that goes into the value of property. Imagine how much of that then gets spent into the UK economy! Labour really have no idea about business!!