Rent controls do work claims Green Party

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Rent controls do work claims Green Party

The Green Party claims that “rent controls can work,” despite evidence suggesting otherwise.

Speaking at the New Economics Foundation, Green Party leader Zach Polanski claimed rent caps would help tenants facing rising rents.

He also called for the abolition of the right-to-buy scheme.

Rent controls can work

In the speech, Mr Polanski said: “Spiralling rents are ripping the heart out of communities across the UK. Renters are being forced to cut back on essentials just to afford the cost of a roof over their heads, and it’s not just individuals who suffer as a result, it’s the entire economy.

“So it’s time to do things differently. We know that rent controls can work, and we can learn so much from the different models that have been tried elsewhere. Rent controls are an established part of private renting in 16 European countries and it couldn’t be clearer that the UK’s got some catching up to do.

“If we had frozen rents in autumn 2022, households in Britain would be saving over £3,300 per year on average. Across Britain, that would put £18bn of purchasing power back in the pockets of ordinary people, money that could be spent in local businesses, buying a coffee on the way to work or a few pints at the end of a hard week.

“Instead? straight into landlords’ pockets, leaving our high streets hollowed out. Green MP Carla Denyer tried to fix this scandal, pushing for rent controls to be included in the Renters Rights Bill, but this Labour government just wouldn’t listen. A Green government would bring in rent controls. We would stop the chokehold of rip-off rents and breathe life back into our communities.”

More harm than good

However, Mr Polanski failed to mention that rent controls do more harm than good and actually do far more damage than benefit tenants.

According to the Institute of Economic Affairs (IEA), while rent controls may initially lower rents for existing tenants, they typically lead to higher rents in uncontrolled sectors and reduce housing supply and quality.

Even in Scotland, the rent cap has been blamed for soaring rents, which have increased by 11.6%.

Data by Hamptons reveals Scottish landlords are increasing rents at a faster pace than anywhere else in Great Britain because of rent controls reshaping the market.

Lead analyst at Hamptons, David Fell, said: “The evidence from Scotland suggests that rent controls rarely work as intended.

“At best, they delay rent increases; at worst, they set a new benchmark where landlords feel compelled to increase their rents every year by the maximum allowed.

“Faced with uncertainty over future rules, many landlords choose to raise rents little and often rather than risk falling far below market levels.”

Need to end right to buy

Mr Polanski also claimed the Green Party would abolish right-to-buy.

He said: “Over two million houses have now been sold under right to buy since it was introduced. In the first place, those houses went to people who had worked hard and saved up to own the home they lived in and loved, but now they’re increasingly owned by private landlords, property developers and investment firms who treat those homes, and their tenants, as cash cows.

“One in six private renters is now renting a former council home, often at extortionate rates, and often partly paid for by the government in the form of housing benefit. Another example of a system which is not only totally unfair but utterly incoherent. Our Green MP Sian Berry, she’s been fighting hard to end this mess, calling for councils to be able to buy back homes lost through right to buy.

“We need to end right to buy completely. Build more council homes and control rents so everyone can afford a decent roof over their heads.”

You can watch Mr Polanski’s speech below with him talking about rent controls at 42:35

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