Sorry Ken, rent caps aren't the best answer to our housing crisis

Ken Livingstone correctly identifies many of the problems in the rental market. But a more workable solution than his proposed rent cap may be right under our noses, says Shelter's Robbie de Santos.

Ken Livingstone, writing on Comment is Free on 19 July, was right to highlight the issues with private renting. We agree with much of his analysis – renting is too often unaffordable, unstable and subject to poor conditions and bad management. But we’re not sure that comprehensive rent caps are the answer.

For too long private renting has been the Cinderella of housing policy, largely ignored while successive governments dreamt up ways of helping first time buyers get on the ladder or fiddle around with social housing provision. Talk of private renting was quiet for a while, but in the last few years politicians have been forced to acknowledge that renting from a private landlord is the new norm – and an often unsatisfactory norm at that.

So who rents now? Well over eight million adults do, and more than a million families with children. Almost a third of private renters are over 45, and the biggest recent increases come from the top and bottom ends of the middle income bracket. Many of the new generation of renters are not there through lifestyle choice – it is a necessity as many will not be able to buy a home or access social housing. Politicians would be wise to spend a bit more time improving their lot.

What’s wrong with renting? Mr Livingstone touched upon unaffordable rents, hefty rent increases, poor standards, rogue landlords, and rip-off letting agents. Government statistics tell us that private renting families with children are ten times more likely to have moved house in the last year than those with a mortgage. Renting in this country can mean short contracts and uncertainty over future rent levels, which are increasing rapidly in many parts of the country.

There are effectively two different ways of making renting more workable. The old-style rent cap involved setting overall maximum rent levels, giving tenants indefinite contracts, and limiting the rent increases that could be given to tenants once they were in a contract. That’s what we had in this country until 1988.

But Shelter’s research finds that few other comparable countries have such an intensive set of controls. In Germany, France and Spain, rents are determined by the market at the outset; tenants have longer term contracts (often indefinite in Germany, three years in France and five years in Spain) and, as long as tenants are in these contracts, their rent can only be increased by an inflationary index.

These countries don’t cap overall rents; they just allow people to have more certainty and predictability about their future renting costs for a longer period, allowing them to anticipate higher rents and to know that they won’t be priced out of their own home.

Capping overall rents goes against the grain of the market – whether this is good or not, some of the side-effects can be really quite undesirable. In markets with rent caps and where demand outstrips supply, a landlord may discriminate on tenant rather than price. This could see people with lower incomes losing out because landlords might see prospective tenants with higher incomes as more reliable. For example, in New York City, where some apartments are subject to rent control, the people who may benefit the most from controlled rents are precisely the people who may find themselves excluded from such apartments.

Rent levels are high because there are too many people who have to rent, and not enough homes available for them to rent, driving up the prices people have to pay. Rents can only be reduced by increasing overall supply of all types of homes, so that fewer tenants are competing over each available home. Building new homes, including for rent, has to be a priority – especially in high pressure markets like London.

But introducing tenancy types like those in France and Spain could improve life for private renters up and down the country. For example, a five year tenancy with inflation linked rent increases could help families break from the uncertainty of short contracts and unpredictable rent increases, giving them the stability to make their rented house a home and plan for the future.

Shelter recently commissioned global property consultants Jones Lang LaSalle to look at whether landlords would be able to work with longer term tenancies. They would. In fact, rental indexing would enhance landlords’ returns, by keeping rents in line with inflation, reducing void periods and cutting out letting agents’ fees. Not only could they be attractive to landlords, longer tenancies could also be offered today, developed from the current framework.

As appealing as rent caps may sound, a more workable solution may be right under our noses. Longer Assured Shorthold Tenancies, with inflation-linked rents, could give millions of renters the chance of a stable home that they can truly make their own.

Robbie De Santos is Policy Officer at Shelter.

London faces a shortage of housing. Photo: Getty Images

Robbie de Santos is a policy officer at Shelter.

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"We are not going to change": Barcelona defies terror with a return to normality

After a attack which killed 14 and injured scores more, shock gives way to defiance and unity.

A perfect summer afternoon in Barcelona suddenly turned into a nightmare on Thursday evening, a nightmare that has become far too common in Europe in recent years. 

“I was having a coffee here [in Plaça Catalunya] and was about to go and walk down there like everyday, because I live just off the Ramblas”, says 26-year-old Eneko de Marcos, pointing down the promenade. “I stayed because I was waiting for a friend, and when she came we heard a big noise and then everyone was running."

Thousands of people, most of them tourists, had been ambling casually along the Ramblas, the most iconic of Barcelona boulevards, which descends from Plaça Catalunya to the old port and the sea, when a white van had mounted the pedestrianised centre of the walk and began driving into people. 

Even after the van came to a stop, leaving a trail of dead and injured in its wake, De Marcos and hundreds of others were trapped for hours inside bars, shops and hotels while the police cordoned off the area and investigated the scene.

Seeing the Ramblas and the surrounding areas completely empty of people following the attack is, for anyone used to the area, unreal and the first reaction for most has been shock. Barcelona had felt safe both to locals and tourists, which had been coming to the city in increasing numbers since last year, many perhaps trying to avoid other destinations in Europe seen as more at risk of attack. 

Shock gave way to confusion and fear during the evening. The van driver was still at large and a series of ugly images, videos and unconfirmed rumours about other attacks spread across social media and the news. The number of victims increased steadily to 13 dead and more than 80 injured of many different nationalities.

At 11pm the city centre and its surroundings were eerily quiet and dark. Few people were venturing on to the streets, and the bar terraces which would normally be packed with people enjoying the late dinners Spaniards are famous for were half empty.

The next morning Barcelona woke up to the news that after 1am that night the Police had stopped a second attack in the touristic beach town of Cambrils, an hour and a half away to the south. What was going on? The streets of Barcelona were still quiet, far too quiet in a city usually noisy and crowded, and again the terraces, so symptomatic of the Barcelona’s mood, were unusually empty.

“I always said something like this would never happen in Barcelona”, says Joaquín Alegre, 76, walking through Plaça de Catalunya the morning after with his friend, Juan Pastor, 74, who nods and agrees: “I always felt safe.”

But slowly fear had given way to defiance. “Afraid? No, no, no”, insists Joaquín. “We’re going to carry on like normal, respecting the victims and condemning the attack, but we are not going to change”, says Juan.

Little by little the Ramblas and the whole area started to fill up during the day. People came from all directions, all kinds of people, speaking all kinds of language. The day was beautiful, the sky was blue, there are no clouds in sight and it got hotter by the minute. It began to look like Barcelona again.

“It’s important not to show fear, that’s what (the terrorists) want”, says Emily, an 18-year-old from Dresden, in Germany, who landed yesterday at Barcelona airport with her mother a few minutes after the attack. She says people were checking their phones while still on the plane and then one girl said aloud there’d been a terrorist attack in Barcelona. “It’s important to come here (to Plaça Catalunya) at this time”, says her mother, Anna, 42, both of them sitting on a low wall at the square.

Next to them, where the Ramblas begins, people once again filled the boulevard full of shops and hotels, which many locals also see as a symbol of how tourism has gone wrong in Barcelona. But Catalans, Spaniards from elsewhere and foreigners mingled happily, feeling united against a common enemy. Many left flowers and lit candles at the feet of a big ornamental lamppost on top of the Ramblas, many others did the same next to the famous Canaletes fountain a little down the promenade. 

“We the people have to respond to this by getting out and taking the streets”, says Albert Roca, a 54 year old publicist, who’s decided to come against the wishes of his girlfriend, who told him he was crazy. “I took a picture of the Ramblas and sent it to her and wrote, ‘Look how many crazy people there are’.”

Just before noon the Mayor of Barcelona Ada Colau visited the Plaça Catalunya with her retinue. She is a very popular figure who comes from civil society in a country where many citizens don’t feel properly represented by traditional politicians. Many people followed her carrying roses, a symbol of Barcelona, while they made their way into the square.

Shortly after, around 100,000 people packed Plaça Catalunya and its adjacent streets for a minute of silence begins for the victims. Only the flapping of pigeon’s wings overhead can be heard. And then an applause and a loud chant break the silence: “I am not afraid! I am not afraid!”, sang the people in Catalan.

Along with Colau in the centre of the square there was Carles Puigdemont, the head of the Catalan regional government and leader of the independence movement that has called for a referendum on 1 October, and along side them, King Felipe as the head of State, and Mariano Rajoy, the Prime Minister of Spain and a bitter political rival of Puigdemont. Seeing them standing together presents an image that until yesterday afternoon would’ve seemed impossible.

Very slowly people start emptying the square, where many still remain singing defiantly. “The attacks yesterday were a disgrace”, says a doorman just outside the city centre as Barcelona began returning to normality, “but we are going to carry on, what else can we do?”