David Caldwell

The government's Renters' Rights Bill looks like it will be a catastrophe, inadvertently introducing rent controls and reducing the supply of housing even more. It is the clearest evidence that the whole British state that has brought it about is completely broken: • Written by the civil service • Introduced by the Tories • Passed by Labour and the Lib Dems • Cheered on by the mainstream media The bill's core provision is to eliminate "no-fault evictions". Many understand this to mean evictions during a rental lease. In fact, this is already impossible. What the new bill does is to stop landlords from being able to regain their property after a lease has expired. This means that renting a property to someone now means that they get to live in that property indefinitely. A landlord can only evict them if they are selling the property, or plan to move into it themselves, or if a tribunal gives them permission after ruling against the tenant for bad behaviour. Within these indefinite contracts, rent increases will be capped at whatever the 'market rate' is determined to be by a tribunal. Tribunals will not be able to *raise* rents, as they currently can and often do – only lower them or keep them where they are. The only risk to a tenant is that their challenge is deemed "vexatious". Not only will rent increases *within* contracts be controlled by courts, rents for *new* contracts will also be controlled by them. Tenants will be entitled to agree a rent, move in, and then immediately take their landlord to a rent tribunal on the grounds that the rent they have just agreed to is "too high". Rent tribunals will thus have the power to control all rents. All rents will be set under the threat of a tribunal intervening. There will be no "market rate", so the tribunal will have no independent "market rate" to refer to. A tenant who challenges a rent increase will have their rent frozen at the old, lower rate while their challenge is ongoing (which could take over a year). Like the Building Safety Regulator right now, tribunals are likely to be extremely backlogged, creating huge delays where tenants do not have to pay their new higher rents, if they ever do. Tenants will have huge incentives to challenge nearly all rent increases. We have already seen how bad courts are at ruling on prices, eg in cases where Next's shop workers have been given the same pay as factory floor workers, and in Birmingham where the council was forced to pay £760m to care workers and teaching assistants because a court decided that these roles were equivalent to jobs like rubbish collectors. All this amounts to rent controls. These are terrible for many reasons. 1. They will cause landlords to sell up and leave the market. This is both to avoid the risk of being stuck with a bad tenant, and because once the rent has been kept artificially low by a rent tribunal, landlords will be losing money compared to just selling into private owner-occupation. Rental properties allow for easy doubling up (housesharing) which is much messier under owner-occupation. The effective supply of housing is about to drop. In Ireland, postwar rent controls shrunk the rental market from 26% to 8% of the total housing stock in 40 years. In Britain, 1916–88, the share of properties available for rent went from 75% of the market to 10%. 2. They cause landlords to neglect their properties. Landlords receiving artificially-depressed rents for their properties have no incentive to maintain them. Rent controlled properties, famously, become neglected and fall into decay, as leaks, cracked plaster and broken windows are left unaddressed. The country's housing stock that remains in renting will decay. Our cities will become more decrepit. 3. They stop people from moving around for better jobs. We already have this effect with social housing, where huge amounts of inner London housing (30–40%!) are held by tenants in low wage jobs, or who have no job at all, instead of by people who could move to London to earn and produce more. This will happen to large swathes of the rental market too, stopping people from moving into prosperous cities where they could get better jobs. 4. They stop the supply of new homes for rent. Under rent controls, there is no incentive to build new homes for renting. Britain built essentially no private flats for rent between 1945 and the end of rent controls in 1988. The same was true in France between WWI when it introduced rent controls and the slow end of rent controls in the postwar era. 5. They push renters into the black market. To actually get a place to live, a lot of people will sidestep these new rules and rent informally, with none of the protections we currently have for renters like the deposit protection scheme. This is the sort of scenario that allows landlords to *really* exploit and steal from their tenants. – Do not assume that anyone involved with this knows what they're doing. We have already seen, in the case of the Building Safety Regulator and the second staircase regulations (brought in by the same Housing Secretary who designed this bill), how disastrous the consequences of well-intended but misconceived interventions in the housing market can be. London building has already ground to a halt. And things are about to get even worse.