Rented Housing and Market Rents: A Social Policy Critique

The private rented sector of the British housing market has been in decline since the beginning of the present century; that decline has continued apace since the end of the Second World War. A proposed solution for the stemming of this demise is the removal of present rent controls and the substitution of free market conditions so that rents find their own market levels. This, so it is argued, would enable landlords to obtain a proper return on their housing investments and lead therefore to an increase in supply and an ending to the present disinvestment from this housing sector. This article disputes this thesis. In the first place it is argued that “market rent” is a problematic concept and raises complex issues of distributive justice and social policy — which its advocates ignore. Secondly, it is argued that a free market solution is ahistorical in that it takes no account of the past failure in Britain of privately rented housing; and similarly it ignores the complex web of historical circumstances behind its decline — attributing the decline to the single causal factor of rent control. Thirdly, it is suggested that a market solution is sociologically misconceived because it ignores the characteristics and needs of those social groups dependent upon this sector. Finally, on grounds of practicability it is proposed that a free market in rented housing may be quite inappropriate for the rump of housing stock remaining in the private rented sector; and that, given the current social and economic constraints operating in the housing market as a whole, any revival of this sector is unlikely even with enhanced rental inducements. It is thus concluded that a free market solution is misconceived and would merely serve to impose an ideological straightjacket upon the provision of a basic human need.