In a rare display of common sense and having listened carefully to all stakeholders, Housing Secretary Michael Gove has confirmed that – unlike in Scotland and potentially Wales – there will be no rent controls introduced in England.
In further clarification of his stance, he also rejected calls for Valuation Office Agency data to be made public so some form of assessment could be made as to what constitutes “a justified rent increase.”
Michael Gove explained: “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.”
“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.”
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“In the new system [under the Renters Reform legislation, 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.”
“[to reiterate] 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.
We think this is a triumph for common sense. There are numerous examples where rent controls have been enforced and the impact has been a reduction in the supply of properties and also a detrimental impact on the quality of accommodation. It is important to retain sufficient incentives in the market to ensure the continued supply of quality rental properties. Only this approach will enable rents to remain broadly affordable.
At Lifeboat Lettings we will always help and advise landlords and assist where we can.
If you would like some help with any of the subjects covered above or anything else relating to properties or lettings, please email contact@lifeboatlettings.com.
