Would a Rent Freeze Work in the Private Rental Sector?
A top Conservative politician has called for a rent freeze on the private rental sector. Natalie Elphicke suggested a way to battle the cost of living crisis was to prevent landlords from raising rents for the next two years and ban them from re-letting them at a higher price as a way around the freeze.
Elphicke told Conservative Home that she wanted to see “a newly shaped Department for Housing and Households” that would “robustly challenge the total costs of household bills.”
The MP criticised landlords for the growing rental prices in recent months and suggested the drastic action in what some people see as an attempt to gain a job in the new Cabinet.
But would a rent freeze work in making life manageable for more people? The suggestions certainly caused some argument, but here are the reasons for and against preventing landlords increasing their rents.
Arguments For a Rent Freeze
Elphicke’s argument is that rent rises are fuelling inflation and increasing the struggle for families in the cost of living crisis. She claims that her scheme would challenge household bill rises, concentrating on rent. The savings, in her calculations, would be around £2,000 for the average renter, and up to £4,000 in London.
It is certainly true that knowing exactly what you are going to be paying for your rent for the next two years would mean that families could budget more easily and not have to worry about another bill increasing.
She also claims that rent freezes would bring down inflation and, therefore, interest rates. In addition, as many renters receive housing rental support, preventing increases in rents would save the public purse from paying out any more.
Arguments Against a Rent Freeze
Of course, a rent freeze means that there is no increase in outgoings for housing during that period of time for renters. However, with landlords facing increased uncertainty over the future of their investments in the current financial climate, there would likely be a clamour to raise rents significantly before the ruling came into effect. Even if that didn’t happen, at the end of the two-year freeze, the economic situation might require major rent rises in order to restore financial stability for the landlord.
Elphicke states that it is tenants and not landlords that pay the swiftly rising energy bills, but that is not always the case. Many landlords package utility bills in with rents, and they will lose their ability to raise the amount, which could see them suffer financially. In addition, landlords still need to pay their own energy bills and those in their office if they have one. Not to mention the increased costs of insurance and mortgages. At a time when many businesses are legitimately increasing prices to offset the higher bills, it seems unfair not to allow landlords to do the same.
Help for Landlords
Times are tough for landlords and the chances are you have less time to spend maintaining your properties and keeping up with the increased legislative burden. Another ruling to adhere to will just make that overwhelm worse, so make sure you seek out options to help you manage properties more effectively.
Outsourcing these tasks to us ensures a professional and prompt service for landlords, letting agents and tenants alike. Call us on 0208 5757630 to discuss your needs today.
