The Rising Tide of Rent: A Personal Struggle Amidst a National Crisis
By Brad Young, from the Money team
When Craig, a 42-year-old resident of Falmouth, received the news that his rent was set to increase by nearly 20%, his initial reaction was one of despair, but it quickly turned to concern for his mother. At 77 years old, she is battling dementia, a diagnosis that has transformed Craig’s life over the past three years. His weekends are now consumed with driving to her home in Penzance to provide the care she desperately needs. The looming rent hike, which translates to an additional £1,200 a year, poses a dire dilemma for Craig: he must consider selling the very car that enables him to care for her.
"Everybody is just shocked. It’s just really unfair," Craig expressed, opting to keep his last name private to avoid potential repercussions from his landlord. "I either pay the rent or I’m on the street."
The landlord, who purchased the block of 15 flats just months prior, has raised Craig’s monthly rent from £550 to £650 for a cramped single room. The kitchen lacks space for a fridge, and the bed nearly touches the sofa. For Craig, who has been a lifelong renter, the situation feels exploitative. He likens the rental industry to a parasitic entity, comparing many landlords to ticket scalpers who profit without contributing to the community.
The Burden of Rising Costs
As a shop assistant in a department store, Craig’s financial situation was already precarious before the rent increase. He was spending a staggering 40% of his income just to maintain a roof over his head, far exceeding the 30% threshold considered affordable. The median rent in many local authorities across England and Wales has surpassed this benchmark, according to the Office for National Statistics.
To make ends meet, Craig has curtailed his social life, redirecting every spare penny towards essentials and the upkeep of his car, which is vital for transporting his mother to medical appointments and grocery shopping. "It’s just shocking what they’re getting away with," he lamented, advocating for rent controls and stricter regulations in the rental market.
The Call for Rent Controls
Craig’s sentiments resonate with many across the UK, as activists from organizations like Generation Rent push for rent controls that would limit increases to either inflation rates or wage growth—whichever is lower. However, this proposal faces staunch opposition from landlord and estate agent associations, who argue that such measures infringe on property owners’ rights and could lead to a more challenging rental market for tenants.
The debate over rent control has drawn a stark line across England’s northern border. In Scotland, the government has introduced the Housing (Scottish) Bill, which aims to establish long-term, localized rent controls following a series of post-COVID experiments. In contrast, the Labour government in England has firmly stated that rent controls will not be included in its Renters’ Rights Bill, nor will it support London Mayor Sadiq Khan’s request for rent control in the capital.
Diverging Perspectives on Rent Control
James Wood, head of policy at the National Residential Landlords’ Association, is a vocal opponent of rent controls. He argues that capping rents would lead to a decrease in available rental properties, as landlords would be unable to cover rising maintenance and mortgage costs. This, he claims, would drive landlords out of the market and deter new investors from entering the build-to-rent sector.
Conversely, Generation Rent counters this argument, asserting that most private landlords in the UK do not contribute to new housing supply. According to Savills, build-to-rent properties account for a mere 2% of homes in the private rental sector. Ben Twomey, the chief executive of Generation Rent, argues that if landlords focused solely on raising rents to unsustainable levels want to exit the market, that would not be a loss for tenants.
The Landlord’s Perspective
Keith Rowe, a 56-year-old landlord from Sunderland, offers a different viewpoint. Having been in the rental business for 33 years, he is not opposed to rent controls and empathizes with the struggles of younger generations facing exorbitant rental prices. He recalls a time when his first home cost just 3.5 times his salary, while his daughter now faces prices that are ten times her income.
Rowe expresses frustration at the negative portrayal of landlords in the media, emphasizing that rent increases are often driven by rising costs rather than greed. He believes that any effective rent control measures must consider the broader economic landscape, including inflation’s impact on maintenance costs and the financial burdens imposed by government regulations.
The Complexities of Rent Control
Research into the effects of rent controls presents a mixed bag of results. A comprehensive survey of 200 studies conducted by Konstantin Kholodilin, a senior researcher at the German economic research institute DIW Berlin, found that while rent controls typically reduce rental costs, they can also lead to a decline in housing quality. This is because while rental income is capped, the costs of maintenance and repairs continue to rise with inflation.
Malcolm Combe, a senior law lecturer at the University of Strathclyde, cautions against oversimplifying the issue. He notes that while rent controls can have negative consequences, poorly designed controls can exacerbate problems rather than solve them. He points to Canada as an example where, despite the introduction of rent controls, rental supply did not diminish compared to cities without such measures.
The Historical Context of Rent Control in the UK
The UK has a long and complicated history with rent control, having experimented with various forms since 1915. Initially introduced to combat perceived landlord profiteering during World War I, controls were relaxed in the interwar years, reintroduced during housing shortages in 1939, and ultimately abolished in 1989. Despite this history, the current Labour government remains opposed to reintroducing rent controls, citing concerns over potential negative impacts on housing supply and quality.
In Scotland, the government has taken a different approach, implementing temporary rent freezes and capping increases in response to the cost-of-living crisis. The Housing (Scottish) Bill aims to establish a more structured framework for rent increases, allowing tenants to challenge excessive hikes through a tribunal system.
The Ongoing Struggle for Fair Housing
Back in Falmouth, Craig has taken proactive steps by writing to his landlord, requesting a more gradual implementation of the 18.3% rent increase. Unfortunately, his landlord has shown "absolutely no remorse" for the financial strain this places on him. Craig feels trapped in a cycle of renting, forever burdened by the costs of housing that seem to benefit wealthier individuals at his expense.
"I dread to think how many people’s mortgages I’ve paid off in my life," he reflects. "People are desperate. They’re not going to end up on the street; it’s an outgoing they’ve got to pay… so they [landlords] know they can always put it up and put it up, and they’ll always have somebody that’s going to take it."
As the debate over rent control continues, the stories of individuals like Craig highlight the urgent need for a solution that balances the rights of landlords with the pressing needs of tenants. The struggle for fair housing is far from over, and the voices of those affected will play a crucial role in shaping the future of the rental market in the UK.
