Jeremy Corbyn Proposes Rent Controls to Reform “Dysfunctional Housing Market”
Jeremy Corbyn Proposes Rent Controls to Reform “Dysfunctional Housing Market”
In his recent Labour party conference speech in Brighton, Jeremy Corbyn pledged the introduction of rent controls, in which local authorities either set rent levels or put a cap on how much they can be increased, in order to tackle what he described as a “dysfunctional” property market.
In his speech, Mr Corbyn stated that the power to control rents would be given to UK cities, similar to set-ups in some other European countries, such as Spain, France and Germany.
He said: “Rent controls exist in many cities across the world and I want our cities to have those powers too and tenants to have those protections.”
Mr Corbyn also set out his wider vision for the UK’s housing market, adding:
“We also need to tax undeveloped land held by developers and have the power to compulsorily purchase. As [former Labour leader] Ed Miliband said: use it or lose it. Families need homes. No social cleansing. No jacking up rents. No exorbitant ground rents. If you want to see how the poor die, come see Grenfell Tower.”
Renters welcome Labour leader’s proposal
Mr Corbyn’s pledge to introduce rent controls has been met with mixed responses from the public – but many renters have welcomed the proposal.
Simon Youel, a young renter in Kilburn, north-west London, said that he liked the idea but hoped that measures to tackle the housing crisis would be expanded upon by the Labour party. He said: “Any policies which can make housing more affordable for everyone would be good, but rent controls still feels quite moderate. I think far more radical action has to happen if we’re really going to tackle the root of the problem, which is the housing shortage.”
Due to the long-term increase in house prices, many young people can no longer afford to buy their own homes. The number of young people renting from a landlord has doubled in the past decade, with 48% of 25-34 year olds renting from a private landlord in 2014. In addition, figures also show that rents are rising faster than inflation, with rent prices rising by 8.2% in 2014 and the cost of weekly rent rising from £163 to £176.40.
The Royal Institution of Chartered Surveyors also notes that UK rents are set to rise faster than house prices, with house prices expected to rise by 20% and rents predicted to increase by 25% in the next five years.
Landlord response: bad for business?
While Mr Corbyn’s proposal has been praised by many UK renters, his comments have been met with criticism from landlords and property investors.
David Cox, chief executive of ARLA Propertymark, said: “The Labour Party clearly hasn’t learnt the lessons of history. The last time rent controls existed, the private rented sector went from housing 90% of the population to just 7%.” Mr Cox added that wherever rent controls are enforced, the conditions in rented properties “deteriorate dramatically.”
Richard Blanco, a private London landlord, has claimed that the introduction of rent controls in the UK would be bad for his business and would also adversely impact tenants. He said: “I would feel very angry because I’ve built my business over many years with a lot of hard work. I house 28 adults and five children and their homes would be at risk.”
Are UK rent controls practical?
While the prospect of rent control sounds promising to many UK residents renting expensive housing, the actual application of rent control maybe more complicated.
Shelter chief executive Polly Neate says: “There is a growing debate about the crisis facing those who rent, with families facing rising bills and insecure lets. Shelter supports controls that lengthen tenancies and protect families from unfair rent rises but not old fashioned rent-setting which we think could end up harming the very people on low incomes they’re meant to help, if and when landlords sell their properties.”
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