Meeting of the Parliament 03 December 2014
I welcome Mary Fee’s motion because it gives us an opportunity to address an issue at the centre of the discussion on the private rented sector: the parties’ various positions on rent controls.
I hear what was said in the opening speech—that the Labour Party is apparently not in favour of rent controls—but I also hear that it is in favour of limits on annual rent increases. I am beginning to have some difficulty in understanding what is meant by rent controls, and why Labour wants one of those things and not the other.
It is sometimes said that there is nothing new under the sun, and rent controls have been tried often enough before. They were first introduced in the UK in 1915, so an opportunity exists next year for us to celebrate their 100th birthday by burying them deep in our history.
Any student of housing policy history will acknowledge that the introduction of rent controls in 1915 had a catastrophic effect. The number of houses to rent in the private sector collapsed dramatically as landlords sold off their stock, and the levels of investment in improvements also fell. The reintroduction of controls in the present day would make it more difficult for landlords to access finance, as lenders may be nervous of future interest rate increases against a backdrop of severely limited rent increases.
The year 1915 was not the only time that rent controls have been attempted in this country. They returned during the second world war, with significant effects. It is important that we do not make the mistake, whoever we are, of going forward with a third-time-lucky approach and our fingers crossed.
Although rent controls were abandoned in the UK many years ago, they have, in various forms, continued in many places throughout Europe. However, in those examples the effect of the rent controls is to keep rents at or around market levels. It may be, then, that introducing rent controls here would either result in the negative impact that I described earlier or, if the Scottish Government chooses to follow a European model, have little or no impact on rent levels.
Of course, it no longer surprises me that Labour, bereft of its own ideas, appears to use the position of Shelter as a default setting for its housing policy. However, I have discussed the private rented sector with Shelter, and it seems to me that it enjoys a much more sophisticated and realistic understanding of the issues than do some members in the chamber.