Rent controls in Manchester would reduce number of homes to let
Introducing rent controls in Manchester would choke of the supply of homes to rent making it more difficult of tenants to find a place to live, according to the lettings industry.
The warning from the Residential Landlords Association (RLA) comes as a new report calls for the Greater Manchester Combined Authority to have powers to implement forms of rent control.
The report published jointly by The Royal Society for the encouragement of Arts, Manufactures and Commerce and One Manchester argues that the Government should grant powers for the Combined Authority to establish rent pressure zones to control high rents.
But the RLA says that all the evidence available shows that rent controls lead to a reduction in the supply of homes available for rent restricting choice for tenants, lower quality housing and has led in some places to an increase in homelessness.
In London, where a similar proposal is being made by the Mayor of London, the Centre for Cities has warned that strict rent controls would divide the city’s renters into winners and losers.
‘Rent controls are on the face of it an attractive but simplistic and populist approach to the increased cost of housing. In reality they make the situation for tenants worse,’ said John Stewart, RLA policy manager.
He pointed out that in San Francisco there are concerns that rent controls have discouraged landlords, making the city’s homelessness problem worse, and added that there is evidence from around the world where they have been introduced shows that they reduce supply and drive up the cost of housing.
Researchers in San Francisco also found that the controls helped accelerate gentrification, because some landlords demolished their older properties in favour of new builds, which were exempt from the controls.
‘Having controls on rent is not much help to a person who cannot find somewhere to live because of the cut in the number of properties available. Instead, the Mayor of Greater Manchester needs to work with the private rented sector on how to boost the supply of homes for rent to meet ever growing demand,’ said Stewart.
Others are also concerned about rent controls. Dr Gemma Burgess from Cambridge University’s Centre for Housing and Planning Research, told the BBC that she is sceptical.
‘I’m very dubious that rent control could help tenants and not reduce the stock of rental properties You need to significantly increase supply before you look at rent control,’ she said.
Centre for Cities has warned that strict rent control would close off London to new residents and divide the city’s renters. ‘Trying to suppress the price of already scarce housing without tackling supply won’t work, so increasing supply must remain the Mayor’s priority,’ it added.
Kath Scanlon, assistant professorial research fellow at the London School of Economics, believes that rent controls in London, for example, would put off landlords. ‘Landlords would simply decide they were no longer going to rent their properties,’ she said.