LETTING & ESTATE AGENT

Private sector rents fall in real terms

Private sector rents fall in real terms
The past few months have seen growing calls for the introduction of rent controls in private rented housing.
 
But an RLA analysis of the Government’s independent English Housing Survey shows that private sector rents are falling in real terms. Table 3 on page 19 notes that between 2008/09 and 2012/13:
  
Average private sector rents increased by £10 from £153 to £163 a week – an increase of 6.5%. 
  
Over the same period average weekly rents in the social sector increased by £18 from £71 to £89. This is an increase of 25.4%.
  
Over this period, inflation as measured by RPI was 16.2% and CPI was 16.7%. 
 
Between 2011/12 and 2012/13, average weekly rents in the private rented sector fell from £164 to £163, a fall of 0.6%. 
 
In the same period, social sector rents increased from £83 a week to £89 a week, and increase of 7.2%. 
 
In February 2010, the then Labour Government published a consultation on Investment in Private Rented Housing. This outlined the dangers that rent controls pose. Page 11 said:
 
“A key factor behind the decline in the PRS was the introduction of rent controls during the First World War, and these became more extensive over time. Artificially low rents reduced investment in the sector, contributing to…lower maintenance standards in the stock that remained.”