Safe, affordable housing is the cornerstone of any civilised society. The stress of living in inadequate and overpriced housing has been linked to poor outcomes, causing strain on relationships and family dynamics and negatively affecting health and mental wellbeing. 

 On the other hand, property is a form of investment that provides an important source of income, especially for landlords. One could argue that landlords specifically are also gatekeepers of an essential public service; a significant proportion of the population will need to rent a home at some time in their lives, and there is nowhere near enough social housing to provide it. 

The landlord-tenant relationship could be seen as two sides of the same coin. We both need each other to get what we are looking for – suitable housing that tenants can afford to rent but also offers financial benefit to the person who owns it and chooses to make it available. The current system of determining rental prices could be visualised as a game of perpetual tug of war. Ideally, both sides would be evenly weighted, stabilising the motion of the rope over time. In this scenario, no one is the outright winner, but no one really loses either.

However, history – particularly the last five years – somewhat undermines this rose-tinted view. Rental prices have continued to rise, often above inflation, outpacing growth in average income. This is particularly troublesome for people living in regions that face extra strain on local housing markets. 

The Local Problem

Take, for example, the South West of England. Here in South Devon, with stunning AONB scenery, sparkling waters, and endless coastline, there is a constant influx of tourists willing to pay a premium price for fresh sea air and countryside. While these tourists are essential for the local economy, they also need somewhere to stay. Landlords looking for a high yield are encouraged to meet this need with holiday cottages and Airbnb rentals, sometimes issuing long-term tenants with no-fault evictions to achieve this. 

Combined with lower housing stock (it is the countryside, after all) and restrictions on building due to the importance of the local landscape, the constant pressure of tourism severely restricts supply for tenants who live and work in the area.

The overall supply of property is further strangled by rampant second-home ownership, with many properties left empty for most of the year and not even providing short-term lets. The problem worsened in the West Country during the pandemic when house prices rose at an unprecedented rate in a matter of months as people quite literally escaped to the country.

Unsurprisingly, the dance of supply and demand enormously influences rental prices. The fewer rental properties there are, the more landlords can charge. And if you do not have family that can house you, and rapidly increasing house prices prevent you from buying, you are left with little choice other than leaving your support network behind or swallowing a higher rent.

Returning to our tug-of-war scenario, we see that in many cases, one side has a distinct advantage once the heavily muscled arms of market pressure join the team. Of course, it would be unfair to landlords to suppose they will not have to break a sweat to stay in the game. For example, rapid inflation and the cost-of-living crises left many landlords with no choice but to boost their rental income to avoid defaulting on their mortgages or leaving the sector altogether. 

Is Regulation the Answer?

Although it has detractors, particularly around the removal of Section 21 Notices (the dread of all tenants), which some argue could deter landlords from letting their properties, Labour’s new Renters’ Rights Bill aims to give tenants more power to challenge rent increases. It also plans to effectively ban bidding wars by legally requiring landlords to publish the asking price, not accept higher offers, and limit rent rises to once per year. 

However, the new bill would not address the problem of supply and demand or other factors that push rents above average income levels. For this reason, more people are asking whether tenants could use a form of collective bargaining to negotiate rents, pointing to other countries that have successfully used this strategy to control rent prices for many years.

For example, in Sweden, tenants’ unions are integral to setting rental prices, with properties valued based on factors such as location, size, and quality without full reference to market factors. Importantly, tenants can also challenge unfair rent increases under the protection of a union, reducing the risks associated with individual bargaining. If one party is unhappy with the outcome, they can appeal to a Rental Tribunal to resolve the issue.

The strategy is more effective when the housing supply is robust. After all, the more options tenants have, the easier it is to refuse a higher rent or move elsewhere if a property doesn’t meet the tenant’s needs. 

A Personal Verdict 

Returning to the tourist and second-home hot spot where I live (and rent), I can see how collective bargaining could shelter local families from excessively high prices. If landlords had to negotiate with a group on our behalf to reflect the lower-than-average local wages, perhaps I would not have to spend so much of my free time raising money for my local food bank (many of the clients are on low incomes or facing the choice between food and making rent). 

However, without serious investment in social housing and tighter controls regarding holiday lets, second home ownership, and ringfencing new housing for locals – all issues that seriously constrict supply and influence overall property values – a tenants union can only shout so loud. 

When I close my eyes and imagine tenants and landlords straining to maintain the balance, I can only hope that our government can step in and become the referee we all need by daring to create a socially conscious housing sector fit for the 21st century and beyond.