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Data on rentals ends case for controls

The British Property Federation’s written evidence to the Communities and Local Government Committee inquiry calls for an end to talk of rent controls, arguing they will harm investment in the private rented sector at a time when more, not fewer, homes are needed.

However, the landlord body said that the introduction of licensing for letting agents and a sensible system of landlord registration could help to tackle bad practice in the sector.

Ian Fletcher, Director of Policy (Real Estate) at the BPF said: "Debate on the private rented sector is too often dominated by case study, narrow evidence and prejudice, rather than the full picture and there is real danger that on the back of that we get poor policymaking. Policies that hurt investment in the private rented sector will not help people needing a home and just exacerbate the nation’s housing crisis. We hope the Select Committee will remember that rents reflect local housing markets and come out strongly in rejecting rent controls.

"The official statistics show that there is no scandal on rents in England, which nationally have undershot RPI inflation over the past year according to the official data, and corroborated by Shelter at 2.8% nationally are equivalent to CPI. This compares with inflation in many other sectors that has been rampant, for example energy costs and some foodstuffs. Market rents have also grown more slowly than rental growth in the social housing sector, where rents are allowed to grow by RPI plus 0.5% per annum.

"There will of course be hotspots where rents are rising above inflation, but the best way to remedy that is to build more homes. Other interventions are fraught with consequences, for example our analysis shows that linking rents to inflation would have meant average rents in two-thirds of England’s local authorities would have been higher than the market rents they were last year, sometimes adding hundreds of pounds to tenants’ annual rent."

The Federation’s evidence also provides support for improving quality in the rental sector, by introducing licensing for letting agents, qualified support for a national register of landlords, and further support for institutional investment in the sector.

Fletcher said: "We strongly support efforts to tackle bad practice in our sector, and continue to support many of the recommendations made in the last major review (Rugg Review) of the sector, including its suggested approach to regulating the sector through registration. There is probably more legislation on housing on the statute book than any other topic, but it is typically badly promoted and enforced because it is under-resourced.

"The taxpayer spends less than 3p per annum informing households of their rights and responsibilities in the private rented sector – but has spent more than £4 per household informing them about digital switchover – that sadly says something about the nation’s priorities. There has been a national register of landlords and agents in Scotland for some time, and compliance with it is poor, with the worst landlords continuing to be let off Scot-free. We remain very willing to work with any party seeking to tackle bad practice, but only on suggestions that will be properly promoted and effectively enforced."

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