Rent controls would reduce the supply of privately rented homes and ultimately harm the tenants they are intended to protect, property expert Jonathan Rolande has warned.
The intervention follows speculation that Prime Minister Andy Burnham could include a rent freeze in his cost-of-living programme. Before Burnham entered Downing Street, allies reportedly urged him to freeze private rents for a year, although subsequent reports suggest the Government has ruled out the proposal.
Burnham has previously supported intervention. As Mayor of Greater Manchester, he joined other city mayors in signing a 2023 open letter calling for an immediate freeze on private rents during the cost-of-living crisis.
The debate comes shortly after the Renters’ Rights Act took effect in England. Since 1 May, landlords have been restricted to one rent increase annually, rental bidding wars have been prohibited and tenants have been given the right to challenge unreasonable increases.
MARKET EXIT
Rolande says the renewed speculation “should worry renters as much as landlords” because controlling prices without increasing housing supply would prompt some property owners to leave the market.
He says: “There is no doubt that the rental system isn’t working well. But housing, like any market, comes down to supply and demand.
“Rent controls really are the zenith of pleasing neither landlord nor tenant and, coming off the back of the Renters’ Rights Act, increases in taxes and restrictions on when landlords can regain their property, it’s going to ensure more landlords sell up and get out of the market.
“While it might sound good from a tenant’s point of view, that won’t be of any use if the houses they are currently renting are put on the market by landlords who are fed up with red tape and restrictions.”
MIXED PICTURE
A widely cited study of rent controls in San Francisco found that protected tenants were almost 20% more likely to remain in their homes.
However, affected landlords reduced rental housing supply by 15%, contributing to higher rents across the wider city. The research was published by the American Economic Review.
Rolande adds: “In a rent-controlled market, nobody with a controlled tenancy ever gives it up, but at the same time nobody is incentivised to build or buy more stock to replace it.
“That means if you’re looking to move out or move to a new area for work, you’re going to struggle to rent a home.”
He argues that ministers should instead accelerate planning reform, increase social housebuilding and give existing landlords greater confidence to remain in the sector.
He says: “If Andy Burnham genuinely wants to help renters, the honest move is to go after planning reform, build more social housing at real scale and give landlords enough confidence to stay in the market rather than more reasons to leave it.”
