Rent Control Essay

The London rental market has exploded over the past decade with a recent survey reporting rental prices reaching £1500 a month for the first time. This unrelenting increase in rental prices has continued despite economic difficulties in the UK economy as a whole, by June 2010 London house prices had recovered to levels seen before the 2007/8 recession. The issue of rental prices is one of the most concerning issues facing London, one of the aims of this assay will be to asses the merits of implementing a policy of rent control.

One option for tackling the issue of high rent would be the implementation of rent controls which simply involves passing laws which place a limit on what landlords can charge tenants for accommodation. The case in

In fact, Rent controls may actually exacerbate the problem as landlords are less likely to rent out accommodation at the lower prices. Furthermore, overall investment in property may decrease as potential landlords may be put off listing their property because the financial gain does not justify it. Moreover, private investment in building new homes and apartments could decrease for the same reason. A second issues with rent controls is that they push up demand for the property which is affected by the laws. People who may not have ordinarily looked to rent will be attracted by the cheaper prices thus increasing competition. This has been the case in Stockholm, Sweden where the demand for regulated housing far outstrips supply. For example, over 500,000 people have applied for accommodation resulting in a huge waiting list for rental property. It can also be argued that rent controls decrease the quality of accommodation in the market, this happens because landlords have little incentive to invest in their property. This raises moral issues because whilst families may have access to accommodation, the standard may be below what may be seen as