What Rent Should a Rent Tribunal Set? Some Simple Analytics of Rent Decontrol

Abstract

As deregulation takes place in the UK, rent tribunals are confronted with the problem of setting a “market rent” for previously controlled property. A simple partial equilibrium model of a sector of the rented accommodation market is used to examine the question of setting a “market rent” in the controlled‐rent subsector. It is shown that setting the controlled rent equal to the rent prevailing in the uncontrolled part of the market is sub‐optimal, and a simple formula is suggested which will give a better estimate of the true free market rent.

Citation

Reed, G. (1992), "What Rent Should a Rent Tribunal Set? Some Simple Analytics of Rent Decontrol", Journal of Economic Studies, Vol. 19 No. 1. https://doi.org/10.1108/01443589210015953