John Bibby
John Bibby

By John Bibby

Watch: how we can make renting better by stabilising rents

Last week, in the run-up to the London elections, Shelter published new research showing that over half of renters in the capital are struggling to pay the rent. And while the housing crisis is particularly acute in London, private renters across the country are struggling to make ends meet. On average they spend 43%of their household income on rent.

The effects of this are as far-reaching as they are damaging. A growing number of people are unable to save, driven into debt or forced to cut back on essentials. Ultimately, more and more private renters are being made homeless.

What can be done about it?

Some groups are arguing that we should drastically cut rents with a rent cap. But although Shelter is campaigning for rent reform, we don’t support the imposition of a hard cap like this. Here’s why:

If you want to read more about the research that underpins our position on rent caps you can read it here.

Instead, we think that in order to get to grips with this crisis we need to do three things.

First, we need to tackle the cause of the crisis – England’s chronic shortage of homes, particularly genuinely affordable homes. So we need to build more of every kind of home.

Second, we also need to make sure that housing benefit for private renters keeps up with rental growth, so low income tenants aren’t pushed to the limits in the meantime.

But it’s also clear that renting in England also needs urgent reform to make it fit for the 21st Century – and so that it doesn’t make the effects of England’s housing shortage even worse.

So, thirdly, we do support a change to rent regulation that would stabilise rents, which we call the Stable Rental Contract. This type of reform sets limits on how much rents can rise when tenants are in a home and doesn’t have the risks attached to it that trying to cut rents with a rent cap does. It would:

  • Give renters more certainty about their future rents
  • Protect them from big rent increases
  • Cut down on moving costs

It’s the sort of rent regulation that they have across much of the rest of Europe and you can find out more about it by watching the video below.

2 Responses to Watch: how we can make renting better by stabilising rents

  1. Dan Mann says:

    Stabilisation would’ve been fantastic around 2-3 years ago. Where I live in Bristol saw rents rise on average 18% *in 2015 alone*. It has gone too far already. Stabilising at an unaffordable level, pegged to inflation such that it remains exactly as unaffordable as it ever was, makes no sense. Particularly in a society where real income increases below the rate of inflation essentially causing the stabilisation to limit, rather than stop or reverse, the increasing unaffordability of housing.

  2. Anon says:

    In principle, I don’t have problems with Rent Stabilisation. Although I am more generous to my tenants, because I don’t increase rents at all. It is only when the tenant leaves, when I ask the market rent. However, I don’t get much benefit from any uplift, as I have to spend a lot of money to re-new the property.

    However, those of landlords who keep rents frozen, do want control of our costs and there should be greater protection from tenants don’t look after the property. Landlords are also faced with costs with Licensing. Some councils are charging silly money, but it does feed into the rental cost or if anything, there is less money to spend the property.

    However, for me the entire topic is pointless, because small landlords are going to be hit with huge tax bills. Some landlords could end up paying as much as 120% tax. For my tenants, this is devastating as I have not increased rents in 7 years. I will be forced to sell-up. The only winners will be those tenants who are wealthy enough to afford to buy their own home, not those on lower incomes.