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Can Berlin’s New Rent Control work in UK?

Everyone knows that rents are too high in certain parts of the UK and especially in big cities like London.

For private tenants in the UK there can be a number of problems when it comes to renting too such as short term or insecure tenancy agreements.

One idea that often comes up when people talk about a solution that will help renters is rent control – a Government set legislation that controls the level of rent in certain areas and offer fair tenancy agreements. It is an idea that has been brought in to other major cities around the world including Paris and San Francisco and now Berlin has just brought in a new law that means landlords of properties located in the inner-city area can not charge tenants more than 10 per cent above the local average.

Of course this measure will be popular with renters but the opposite could probably be said for landlords, many of who feel it is only likely to succeed in forcing landlords out of business and deceasing the supply of rental housing.

Part of the reason such measures were needed in Berlin is down to some of the fastest growing rental increases in Europe. Between 2013 and 2014 the average rental cost went up by 9% in the city and it is hoped the new law will but a break on the runaway price boom.

The city has a strong housing market which shows no signs of slowing thanks to a net increase of around 40,000 inhabitants per year. According to officials who brought in the scheme, the Rent Control can help to avoid a situation that is similar to Paris and London where workers with lower paid jobs have to live further and further out of the city to be able to afford housing.

The scheme in Berlin is set to be used as a pilot for other cities in Germany that also have high pressure on housing availability and affordability.

Berlin's increase in inhabitants per year and a growing pressure on housing is something that has similarities with the UK, but would a similar initiative work here?

Specialists in Construction Insurance

Rent control is fairly controversial subject and would certainly face opposition from landlords, but supporters of bringing in a law similar to Berlin in the UK argue that unless we can significantly boost the number of new homes being built to keep up with new demand for affordable houses there may be no choice but to consider capping rental increases.

Critics of rent control however point to cities in the United States like San Francisco where they say rent control at least in part contributes to high rents and less supply. Some landlords in the city who used to offer their properties for rent now keep them empty because they say the capped rents don't allow them to make enough money, when compared with the upkeep and maintenance of a rented property.

There's also an argument about at which point rent control is brought in, it is a measure that is usually considered when rents are already too high so capping them at that moment will still leave most properties unaffordable and out of reach for many people in lower paid jobs.


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