A think tank situated in central London has put forward an intriguing perspective, suggesting that landlords would persist in the rental sector even in the face of significantly tougher and costlier reforms. The Social Market Foundation (SMF) posits that apprehensions regarding diminished rental property supply resulting from stricter regulations are, in essence, overstated. They argue that the English rental landscape, characterized by relatively short-term contracts, stands in contrast to practices in many comparable countries. Furthermore, it is noted that several nations have abandoned the practice of ‘no-fault’ evictions, without causing adverse effects for landlords.
The SMF’s stance challenges prevailing narratives surrounding rental market dynamics, proposing that landlords possess resilience and adaptability in response to regulatory changes. By scrutinizing rental practices across various jurisdictions, the think tank underscores the potential for reform within the English rental sector. Despite concerns about the feasibility and impact of implementing stringent measures akin to those observed elsewhere, the SMF contends that English landlords could weather such changes without significant detriment to their operations.
Moreover, the SMF’s assertion prompts reflection on the broader implications of regulatory interventions in the rental market. As policymakers contemplate measures to address housing affordability and tenant rights, it becomes imperative to assess the potential ramifications for stakeholders, including landlords. By examining international best practices and evaluating their applicability within the English context, policymakers can strive to strike a balance between fostering a fair and sustainable rental market while safeguarding the interests of property owners. Through informed dialogue and evidence-based policymaking, avenues for enhancing the rental sector’s resilience and efficiency can be explored.
According to the Social Market Foundation (SMF), Scotland’s ban on no-fault evictions since 2017 hasn’t resulted in a significant decline in rental availability. Instead, there’s been a rise in the number of households in the private rental sector. Similarly, in Australia, increased tenancy regulation and renter protections haven’t impacted overall supply levels.
The SMF highlights that outside of England, longer tenancies are more prevalent. Scotland and the Republic of Ireland have both embraced indefinite tenancies. In Ireland, despite initial landlord concerns, the policy hasn’t adversely affected housing supply; since its introduction in 2004, the private rented sector has doubled in size.
The paper delves into the contentious topic of rent controls, implemented by the Scottish Government amid the cost of living crisis. While supported by London Labour Mayor Sadiq Khan, they face opposition from the Labour Party nationally. According to the SMF, rent controls are common across Europe and yield varied outcomes beyond textbook predictions.
Rent price regulations, spanning from freezes to curbing increases on existing tenancies, typically alleviate costs for current tenants. However, their impact on property availability varies depending on the circumstances.
In Berlin, with a rent freeze, and San Francisco, where rents are capped at 60% of inflation, there’s been a shortage of properties. However, the SMF asserts no supply impact in the Republic of Ireland, where ‘rent pressure zones’ exist, though it acknowledges more research is required.
Alongside abolishing no-fault evictions and transitioning to rolling tenancies, the SMF advocates enhancing the rent dispute system for improved accessibility and effectiveness.
In England, housing complaints may involve the housing ombudsman, local authorities, or courts. However, in Australia, New Zealand, Ireland, and several Canadian provinces, ‘lead agencies’ serve as the primary point of contact for such issues.
The think tank also suggests licensing and registering landlords, a practice common in the UK and Ireland, or establishing a non-compliance register, as seen in Victoria, Australia. Niamh O Regan from the SMF notes that English renters face challenges compared to those in other countries. Short fixed-term tenancies and the risk posed by no-fault evictions make periodic tenancies precarious. She highlights the need for longer tenancies and stronger tenant protections to improve rental conditions and make long-term renting more appealing, especially given the likelihood of renting for extended periods in the future.
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