Rents in the private sector are increasing by less than inflation, and have gone up by just 1% in the last year across England.
The latest figures from the Office for National Statistics show that even in London, rents rose by an average of only 1.4% in the 12 months to March 2014.
This compares to a consumer prices index rate of 1.7% and a retail prices index rate of 2.5% over the same period.
The Residential Landlords Association says the statistics highlight how rent controls would work adversely for tenants.
Chris Town, vice-chair of the RLA, said: “It’s important that people who talk about controlling rents through linking them to inflation, realise that this could in fact hit many tenants who could face higher rents as a result.”
Private sector rents have risen by 9.5% across England over the past nine years and in London by 12.5%.
This compares with an RPI increase of 33.8% and a CPI increase of 13.3% over the same period. By contrast, council rents rose by 42.5% and housing association rents by 43.8% over the eight years between 2005 and 2013.
The latest rent data for the private rented sector, produced by the Office for National Statistics, can be accessed at:
A summary of the figures can be found in the table below:
| % rent increase | 12 months to March 2014 | 9 yrs March 2005 -2014 |
| Across England | 1% | 9.5% |
| In London | 1.4% | 12.5% |
| England excluding London | 0.7% | 7.9% |
| RPI over the period | 2.5% | 33.8% |
| CPI over the period | 1.7% | 13.3% |
Rent data for local authorities and housing associations can be found at:
That is the problem with trying to circumvent open market pricing, it throws up issues that can worsen the situation.
The same goes for the RICS suggestion a little while ago that the Bank of England should cap capital growth (to 5% if I recall).
The private rented sector is on an ever upward trajectory, those in public ownership of some form or another in decline and for the first time in nearly half a century, the number of people with private landlords exceeded those in public ownership in 2011/12.
So you are a potential B2L investor but then someone says to you that your rent will be limited to the CPI or RPI. Oh and by the way, capital growth on the property will be capped at 5%. Your mortgage adviser tells you that your B2L mortgage will be at a rate of 2.5% which on todays figures will go up to a variable rate of around 5% in 2 years time when that product expires.
Would you invest in a B2L in that scenario?
And what happens to prices in the rented sector if there is any significant reduction in supply because would be B2L landlords put their money somewhere else and existing landlords sell up because the return is no longer there?
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