Balance between landlord and tenant? A comparison of the rent regulation in the private rental sector in five countries

The private rental sector has been declining in many European countries, while home ownership is increasing. In describing the development of the private rental sector, a variety of authors suggest a causal relationship between the decrease of private renting and rent control. The assumption is that the stricter the rent control, the greater the decrease in private renting. Or conversely: the less rent control the more opportunities for the private rental sector. At the same time, however, an unregulated rental market may result in insecurity for tenants. This paper focuses on these conflicting interests, and in particular on the regulation of rents and rental contracts from a welfare theory viewpoint. We explore various market inefficiencies in the private rental market and the government regulation of rents and rental contracts. We then present the results of a comparative study that involves France, the UK, Germany, Spain and the Netherlands. For each country we describe the features of the private rental sector, the rent regulation and the rental contracts. Finally we draw conclusions on the differences in rent regulation between countries and the balance between landlords and tenants.