Cambridge University academics warn against rent controls in London
Giving London Mayor Boris Johnson the power to regulate rents set by private landlords in the capital could restrict the supply of homes for rent at a time when demand for them is growing fast.
Homes provided by private sector landlords now account for 30% of all residential accommodation in London, according to English Housing, which says about 2.5 million Londoners now rent privately.
And a new report by academics from Cambridge University has concluded that a range of moderate stabilisation measures would only result in reductions of between 0 and 15% in the rate at which rents would rise in London will rise over the next 10 years.
The Cambridge Centre for Housing and Planning Research warns that any slowdown in the rate rents in London rise as a result of introducing controls would result in a similar percentage of private landlords exiting the market.
The researchers looked a six ways of controlling rents charged by private landlords in the capital.
Under scenario 1, where rent rises could only match increases in the consumer price index and tenancies would be a minimum of five years, tenants would be at best £6 a week better off by 2020 – paying a projected £352 a week instead of £358.
Scenario 3, which proposes a three-year rent freeze, could make tenants £18 better off by 2017 than they would otherwise have been.
Meanwhile, scenario 5 – which proposes that rents are cut to two-thirds of their current values and any rises restricted to either CPI or the rate of wage inflation – would slash rents to £221 per week by 2020.
However, introducing this form of rent control would result in a significantly lower number of homes available for private rent.
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