Would the Berlin rent cap work for London?

Berlin has become the first capital in Europe to introduce rent control legislation, something that has proven to be a controversial move that has triggered calls for similar measures in other countries. Landlords in Berlin are now prevented from increasing rents by more than 10% above the local average, which is designed to try and slow the progress of some of the fastest rising rental rates in the whole of Europe. Although these controls were already in place for existing tenants they have also now been introduced for new tenancies too – it is hoped that this will narrow the gap between the rents that are charged to tenants already in situ and the price of a new contract.

Just like London, and many other British cities, flat hunting in Berlin has become increasingly more competitive over the past year and the city also has a housing shortage that is making it more difficult to cope with the new tenants arriving on the market. Anyone who has been to Berlin can easily see the appeal of the city – like London, it’s a cosmopolitan hub with an exciting arts scene, as well as a thriving business sector. The city shares other parallels with London too, including the increasing gentrification – areas such as Kreuzberg have been overtaken in the same way as parts of East London and as the number of high end bike shops and designer coffee stores has shot up, so have the rent prices.

However, there’s one big difference between London and Berlin and that’s the fact that rents in the German capital are nowhere near the same as they are in London. In fact, it’s the prospect of ending up like London that appears to have been the catalyst for action. Reiner Wild, managing director of the Berlin Tenants’ Association said “We don’t want a situation like in London or Paris…the reality in Paris or London is that people with low income have to live in the further-out districts of the city.” Berlin rents have been slowly increasing (from just over €5.50 a square metre in 2005 to close to €9 last year) and so there’s every chance that the city could end up with the kind of dire situation we have in London where the city is almost completely unaffordable – especially those areas towards the centre.

Obviously it’s too late in London to stop the astronomical rent rises that we’ve seen over the past decade but would similar measures here stop things getting worse? Figures provided by the Office for National Statistics indicate that private rents in London grew by an average of 15.3% between January 2011 and January 2015 – six times faster than in the north of the country – so there’s clearly a need to do something. Ever since the news of the Berlin cap was announced there have been calls from tenant organisations and housing charities to introduce something similar. And at The Tenant’s Voice we’d like to add our weight to the call for a rent cap too – until more affordable housing appears it might be the only way.

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