Let down

Think tank: Social Market Foundation

Author(s): Jamie Gollings; Niamh O Regan

April 4, 2024

This report from UK think tank the Social Market Foundation looks at rental regulations, subsidies and tenants’ rights across the English-speaking world.

The UK’s private rental sector has grown since the 1990s, but long term renting is still not an attractive option for many due to high costs and limited renters’ rights.

In this Social Market Foundation report, the third in our ongoing series on the housing crisis, we present lessons for the UK from across the English-speaking world. The private rented sector contracted from the 1920s to the early 1990s, but has since doubled from less than one in ten households in 1990 to just under one in five today. Although most renters would like to move into homeownership, the fact that people are staying in the private rented sector for longer means it is necessary to acknowledge that long-term renting is here to stay, and that the renter experience needs to improve.

The report finds that regulations like rent controls can help renters, but are tricky to calibrate to avoid unintended consequences. Countries with rent controls have had a faster growing private rental sector in the decade to 2022 than those without controls, and while places with rent controls do not necessarily have lower rents as a share of income, changes in this ratio are more stable. There is also limited evidence to support concerns that stronger renter protections more generally have a negative impact on supply.

The report therefore recommends using the planned Private Rented Sector Database to understand the rental market better; making renting genuinely affordable for the long term; streamlining dispute resolution to a single body; and abolishing section 21 evictions.