REGULAR readers of my articles will recall that I mentioned Labours wishes to introduce ‘Rent Controls’ should they be elected to Government and this article will provide some more details about this.

Over the past couple of decades rents have increased as a result of a lack of supply and over demand.

The current Government is trying to address shortcoming by allowing more Local Authorities to return to a build policy of council housing coupled with an extensive private build policy.

Rent controls are where the local authority either set rent levels or limit the level of rent increases to say, inflation.

However there can be other reasons for rent rises and not just because Landlords want to be seen as keeping up with current levels.

We have had several occasions where Landlords have up-graded say the kitchen/bathroom/heating systems etc, only to increase the rent to pay for the improvements.

Though some tenants may be more than happy with dated fixtures and fittings if the consequences of improvements is higher rents.

I have also come across graduates seeking the cheapest accommodation, so that they can save more for their deposit to get onto the housing market.

Gone is the need for luxury professional high end accommodation often seen in the cities where the market rents are often over inflated.

But what happens when your Landlord wants to increase the rent just because the market now demands such figures.

Basically tenants can only accept or try to find alternative cheaper accommodation which is not necessarily that easy.

It is also expensive to move.

Jeremy Corbyn has tried to address this by saying that he wants cities to be able to set their own rental levels which is a bit more challenging than previous Labour proposals by Ed Milliband back in 2015 or what appeared in the party’s 2017 manifesto.

Many may not be aware that we already have a form of rent control in place under the Rent Act 1977.

This was way before Assured Shorthold Tenancies when we had Assured Tenancies and some still exist where rents are set by the Valuation Office and are often way below current market rates.

Tenants, if they abide by the terms of the tenancy, have protected tenancies which can also pass ‘once’ to a family successor assuming the successor is living within the property as their main residence.

We still have some of these tenancies within the Stroud district and the consequence is that Landlords' yields are lower as would any selling price should there be a need to sell without vacant possession.

Naturally, this is not a favourable proposition for Landlords and there is a fear that Rent Controls would return the market to a system that benefited Tenants more favourable than Landlords.

By allowing the Local Authority to set rates, these could be more in line with Social Housing figures.

These are similar to market rates in the north though within London the gap is much wider.

For example the Local Housing Allowance for a two bedroom in Stroud and Gloucester is £530.23 with £637.56 for a three bedroomed property.

To find any rented properties within these figures is extremely difficult at present if not impossible which is one argument for implementation.

If we look at Europe, within some countries renting is the norm and the French in Paris have a third party that set rents whilst in Germany there is a cap in cities like Berlin and Munich.

Rent control however is not always a good outcome if it means a reduction in supply of rental properties as Landlords leave the market seeking alternative investments due to reduced yields.

This would result in less housing for those that will never get onto the housing market, affecting the poorest in our society.

However there is a growing trend for rent control in other countries according to Kath Scanlon, a senior research fellow at the London School of Economics who says: “It goes in cycles…In the late 20th century places everywhere were removing or relaxing rent controls, but I'd say it's swinging back the other way now… politically attractive" - because it shows governments to be tackling the problem of unaffordable housing.

It will be interesting to see what develops, will the Conservatives follow Labour or will we need a further general election before the possibilities of rent controls come to fruition.

Please continue to send in your letting related questions to steven@sawyersestateagents.co.uk