Shelter Warns Against Rent Caps
By |Published On: 8th July 2015|

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Shelter Warns Against Rent Caps

By |Published On: 8th July 2015|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

Britain is currently suffering a housing crisis, which has prominently been caused by a lack of new affordable homes. This has caused to record levels of private renters, as homeownership and social renting declines.

Private renting was once a “stepping-stone” for students and young professionals, but is now the only option for one in four households.

Renting can be positive for some. However, many must deal with high rents, short-term tenancies and unexpected fees or rent rises. Families are the worst affected, as regular moves and increasing rents causes problems for children and finances. For every £10 the average tenant earns, £4 goes on rent.

This is why, says homelessness charity Shelter’s Campbell Robb, more renters are joining Shelter’s campaign to demand improvements in the sector. Find out more here:

Shelter Warns Against Rent Caps

Shelter Warns Against Rent Caps

Robb asks: “Why don’t we just cap rents?”

This seems like a simple way to make renting cheaper for Britain’s 11m renters. But the issue is often debated.

Some believe that any intervention in the market, however small, will cause landlords to leave. Others argue that rent caps will bring rents down immediately.

Shelter has decided to find out for itself if rent caps would work, and if not, what would?

“We just want what’s best for tenants – and it was clear they needed some evidence on this issue – so we commissioned Cambridge University to look at various forms of rent regulation and model their potential effects,” says Robb.

The University’s study delivered a clear conclusion. Rent caps may be an easy solution, but they could cause more issues for tenants.

Robb explains: “The researchers predict that driving down the cost of rents in this way will cause evictions to rise, conditions to get worse and make it a lot tougher for anyone on a low income – especially those on housing benefit – to find somewhere to live.”

However, the research also revealed that the market could cope with being more supportive of families. The University’s economic model shows that it would be safe to introduce longer-term tenancies, in which rents could only increase by inflation.

Shelter has proposed five-year tenancies, which are successfully used internationally, which would provide stability for families. Households could also plan their finances more easily under these terms.

Although, Robb warns, this would not solve the problem of high rents.

He says: “And here, sadly, there is no short cut. If we’re serious about wanting house prices and rents to be more affordable, then we have to be building more genuinely affordable homes.”

In the last five years, the budget for building affordable homes was reduced by over 60%.

“There is no way out of this affordability crisis without more homes,” urges Robb.

He continues: “As the charity for people experiencing bad housing or homelessness, our focus has always been on what delivers for tenants. We’re proud to continue that tradition of standing up for renters today.

“In this case, what works best for them isn’t rent caps. Caps could end up making the lives of tenants on low incomes much more difficult, not easier. But that doesn’t mean we don’t need change. Renting families deserve the stability to raise their children that others have and this research shows that the market can offer that, and continue to strive.”1

Housing is extremely expensive in the UK, but this needs to change. Longer-term tenancies will not put first time buyers on the property ladder. However, building more homes will help households buy and benefit those that rent.


About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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