Rent Controls won't solve housing crisis, experts warn

The housing crisis will be made worse by rent caps, two property experts have said.

Various activist groups, much of the Green and Labour Parties and even the occasional Conservative have called for rent caps in the recent past. Scotland’s and Wales’ devolved governments have policies embracing rent caps in one form or another.

Now the National Association of Property Buyers has issued a warning with spokesperson Jonathan Rolande saying: “Rent control isn’t the answer to our housing crisis. In fact, it risks making it worse and creating a whole new crisis. 

“In the very short term, caps give reassurance to tenants who know that their rent will not be increasing.   But unless subsidies to top up the difference are provided by the Government many existing landlords will simply sell up, reducing supply.”

He continues: “Overseas investment in buy to let will drop. More landlords will opt for the more profitable AirBnB style of rental while some landlords will have their properties repossessed. We will also witness new entrants to the sector being deterred. There will still be a housing crisis, it will just be a different set of problems.”

Rolande’s comments echo those of Rick de Blaby, head of Get Living - which owns the former Olympic Village in London - who says rent caps would suffocate supply. 

The fear is that rent caps would accelerate the trend of landlords leaving the private rental sector. 

The number of rental homes has not increased since 2016, according to Zoopla, which estimates that there are 5.5m rental properties in the UK.

The number of homes unoccupied and available to rent is down 38 per cent compared to five years ago, while inquiries with letting agents are up 46 per cent. 

Zoopla calculates that across the country rents rose by 12 per cent last year. Because of the supply-demand imbalance, some commentators expect them to rise a further five per cent this year.