Would ‘rent stabilisation’ benefit tenants and/or landlords?
On 24 September 2014, Christine Whitehead attended a meeting of the Camden Federation of Private Tenants at which she presented the findings of LSE London’s recent research on rent stabilisation and its potential in the borough. The research, commissioned by the London Borough of Camden and completed in August 2014, explored the principles of rent stabilisation, evidence from international models, and the effects on both landlords and tenants.
At the CFPT meeting, Whitehead discussed three generations of rent regulation, providing a snapshot of current rent regulation systems in 12 countries. Synthesising international evidence with local tenant and landlord interviews, the LSE London research concluded that:
Rent regulation is not always good for tenants but bad for landlords
- Can address market failures for both tenants and landlords, while reducing risks for both
- Can give landlords more consistent rent rises, reducing financing costs, but tenants may pay for certainty
- Or can restrict returns to landlords leading to reductions in supply and making access more difficult for tenants
Stabilisation does not benefit either all landlords or all tenants
Its success depends on the detail and the institutional and market environment; rent stabilisation is only one part of the story
Rent stabilisation in Camden could include a voluntary system of longer leases and index-linked rents. This could provide
- Greater certainty and transparency for tenants and landlords alike;
- Benefits to landlords seeking long-term income streams;
- Because it is voluntary it will not restrict supply but rather gives the choice to those who can benefit – and demonstrate these benefits to others;
The full presentation can be accessed here.