Rent Control threat - agents warn politicians not to meddle with market

Propertymark has issued a statement warning politicians not to introduce rent controls by the backdoor through processes which tinker with the market.

In a response to a Welsh Government consultation, the trade body says that without introducing measures that tackle tenant demand and landlord costs, property standards will reduce, landlords will leave the sector and rents will rise. 

It says this has been the case when rent controls have been implemented across Europe and is currently what is being seen in Scotland.

Propertymark has reiterated an opposition to rent controls in response to the Green Paper consultation issued by the Welsh Government. Propertymark supports the concept of making adequate housing a human right in Wales, but it believes rent controls should have been separated from the debate.

The Green Paper uses the term ‘fair rent’ and - according to some - this could be a cover for rent controls. 

Historically, the term ‘fair rent’ has been used in the context of regulated tenancies which allowed the landlord or tenant to apply to have a fair rent registered, which would usually be set below the market rent. This mechanism was a form of rent control, with subsequent increases limited.

The proposals in the Green Paper are that the definition should be broader and be taken to mean “fair” in the wider context of “equitable”, in that it needs to be fair and affordable to all parties involved - in this case both tenants and landlords.

Propertymark is urging the Welsh Government to be cautious about introducing a broad definition that effectively acts as a way of introducing rent controls. This would fail to properly consider whether rent controls are needed in Wales in the first place and the variations in circumstances in different areas of the country.

The intentions of the Welsh Government will become clearer when they publish their White Paper in the early part of 2024, however the consultation did explore different models of rent control. Propertymark is not in favour of any rent control regime and are especially concerned about the prospect of harsh ‘first generation’ rent freezes, as seen in Scotland.

Propertymark says it will continue to engage with the Welsh Government on this issue.