A blunt capping of rents could hurt and not help tenants, Shelter has warned.
The organisation does however want control over rent rises alongside longer tenancies.
In a report commissioned by the organisation, University of Cambridge researchers said that “hard” rent controls would remove landlords’ financial incentive to invest in the sector, leading to fewer homes and less choice.
A survey carried out for the report found 31% of landlords would sell all or some of their portfolios immediately if rent controls were imposed.
The report expresses concern that if nothing is done, rents across England will increase by 22% over the next ten years, from £176 to £215 a week.
It also predicts a large rise in the rental population, up from 4.5m last year to over 7m by 2025.
It proposes that there should be five-year tenancies with rent rises limited to inflation. Shelter’s report says this would be acceptable to many landlords, just as long as they were able to take back the property to sell or live in.
Shelter chief executive Campbell Robb said that rent caps “could add fuel to the fire by pushing landlords out of the market and making it even harder for renters to find a home they can afford”.
Comments (8)
“The report expresses concern that if nothing is done, rents across England will increase by 22% over the next ten years, from £176 to £215 a week.”
THAT, by the way, equates to a yearly increase of 0.96%.
Well done to those that cobbled together the “report” for blatant misuse of percentage statistics – and well done, Shelter, for highlighting the blatant fact that you don’t read or understand what you commission as “justification” for your very existence.
0.96%? 1.22 power 1/10 = 2% OMG rents will double in the next 20 years.
Shelter are masters of drama and manipulated statistics, best ignored! and if they get too uppity remind them of how closely connected Ed Milliband & Campbell Robb were.
D’OH!! Stoopid me – input the wrong number of YEARS into the equation! You are correct with 2% p.a., Robert.
I’ll ‘do a Trev’ and blame the train… ;o)
Build more houses.
before the election Shelter were calling for 3 year tenancies and rent caps. They would not be swayed. Now they have actually carried some research they have changed what they want. Thus what they were asking for was flawed and emotional and had not grounding in reality.
Have they become enlightened? so rent caps would make FEWER properties available and HIGHER rent – WOW smelt the coffee Shelter have we. Exactly what anyone in the industry said would happen.
rent rises of 22% over 10 years so 2.2% increase each year…..Hmmm whats wrong with that? Their research has shown that Landlords need a financial incentive otherwise they will pull out which will result in FEWER properties and HIGHER rents.
See a pattern here Shelter???
So 5 year tenancies but rent caped to inflation How many tenants actually want a 5 year tenancy – hardly any I would wager. Inflation what the RPI? CPI or some other index? What if the index was 10% or higher? still an artificial rent rise does this apply in all areas of the UK? will it be capped? So much can happen in 5 years so a tenant can leave but the owner cant get the property back? We have LL working away on 1 year contracts etc a 5 year tenancy will stop those LL from renting out their property as another poster has said a mortgage company will view the risk of a 5 year tenancy and thus price up the mortgage rate perhaps making it uneconomic to rent the property out thus creating FEWER properties and HIGHER rent.
Shelter stop trying to stab the letting market and landlords in the back. We all know the issues. Yes we do even shelter. BUILD MORE HOUSES. simples. Campaign on that Shelter and you will have my support. Campaign to ban agents fees and increase costs to landlords and you wont.
5 year tenancies are unnecessary and I find most of my tenants tend to stay 2-3 years. IT is rare to remove a tenant if they are doing what they should, (ie pay their rent and not abuse the property or neighbors). If you have a difficult tenant or one who is unreasonable you will be stuck with them for 5 years and this will drive out landlords once they have had just one bad experience. A large majority of tenants are happy with the current arrangements and it works for all. If you listen to everything said by Shelter there is not a good landlord in the world! I appreciate they see perhaps the worst of the letting world, otherwise they would have no clients ! The bad and rogue landlords will not play by the rules anyway and this is the sector they will most likely be dealing with. Drive the good guys out and it will be the majority of tenants will suffer as landlords withdraw from the market and rents increase further due to scarcity. Councils have the powers on maintenance and repair issues if they wish to use them (many councils are biases against landlords probably again because they see the rogue ones more than the good guys). It is time these people target the problem areas rather than the market as a whole!
5 year tenancies?! Let’s see a buy-to-let mortgagee allow those…
I’m all for what Shelter do, but not bank or financial institution is going to change their regulations to allow those with mortgages on property to have a residential lettings contract for 5 years.
Also, that would mean so many laws, rules and regulations will need changing. It does not make sense, and it will never happen.
I concur. It’s **** easy to come up with a suggestion – a mite bit harder to come up with a plan. “We would like to see five year tenancies – and here is our strategy for a financial revolution that will make it happen…”