Housing Secretary, Michael Gove confirms no plans for Rent Controls in England

Some good news has emerged, with the Levelling Up and Housing Secretary Michael Gove confirming that the government has no plans to introduce Rent Controls in England, like the ones currently in place in Scotland, and under consideration in Wales.

Some members of the opposition parties have called for the government to introduce Rent Controls into the private rented sector in England, with the idea that this will help tenants during the ongoing cost of living crisis and with ever increasing energy prices.

Rents across England have sky-rocketed in recent years due to a reducing number of available stock with landlord’s exiting the market, often due to additional regulations being introduced, restrictions on deposits and tenant fees (Tenant Fees Act 2019), proposed reform of the private tented sector (Renters Reform Bill) and the withdrawal of mortgage-interest relief through Section 24. And with the increasing interest rates affecting mortgages, landlords have had to try and recoup additional mortgage payments by increasing the rent, often in large chunks at once, to help make ends meet.

All of the above, coupled with the demand for rented properties being higher than ever and a pitiful number of available social housing throughout England has meant that rent levels in the private rented sector have never been higher, with landlords attempting to meet increasing costs, and tenants fighting off competitors to secure their new home.

In a letter to the all-party Select Committee on Housing, Michael Gove stated:

“Rents in the private rented sector should be agreed between landlords and tenants, and it is not for government to intervene in this. We are clear that landlords must be able to raise rents in line with market prices, but that rent increases which are significantly above this should not be used as a means of backdoor eviction.

Where there are disputes between a landlord and tenant, the first-tier tribunal is best placed to resolve these and to determine the market rent. Making a balanced judgement on what the market rent is means a number of different factors need to be taken into account, such as quality of fixings or proximity to amenities.

The tribunal has experts who can assess the true market value of a property, and it is for those individuals to determine which evidence is relevant. We will update guidance to support all parties in engaging with the tribunal.”

The Select Committee, which does not make policy but consists of MPs from across the House of Commons from all parties and who scrutinise government policy is calling for the government to “stipulate by how much rents will increase” and to initiative mandatory break periods during which tenants could appeal to the first-tier property tribunal if they think their rent has risen above local market rents.

In response, Gove continued by saying

“The government wants to avoid very large rent increases being used as a backdoor to eviction, while ensuring that landlords can increase rents to market prices.

In the new system [Renters Reform Bill, if it becomes law] landlords, as they can now, will be able to increase rents once a year at the rate they deem appropriate. It is only if a tenant thinks this is above market levels that they can challenge this at the First-tier Tribunal. When this happens, an independent expert panel will assess the market price for the property. This could be higher, lower or in line with what the landlord set.

The government is clear that rent should be agreed between the landlord and tenant, and nothing in our proposals prevents parties negotiating as they do now. It is not for government to set or steer rent increases and we do not support the introduction of rent controls. Evidence suggests that these would discourage investment in the sector and would lead to declining property standards as a result, which would not help landlords or tenants.

Rent review clauses can provide a means of backdoor eviction through removing the right to challenge above-market increases and may reduce flexibility for landlords to respond to market changes.”

If you wish to discuss your property portfolio or wish to conduct a rent review, contact our specialist lettings team on 0161 511 5339 or via our contact form for a free portfolio review and consultation.