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

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.