One in 10 landlords are expected to sell up this year as a result of tighter regulation, according to a survey by the National Residential Landlords Association Trade body. Accountancy firm PwC warned that an exodus of private landlords could be damaging for Britain’s economy.
Research conducted by the company found that a 10pc exodus of small and medium landlords from the private rental sector would wipe out £4.5bn and 39,000 jobs.
Michael Gove, the secretary of state for housing, last year warned the House of Commons that controls “are proven to reduce supply overall, and a reduction of supply on the scale that an intervention of the kind that he puts forward would only increase rents and reduce the capacity of people to be able to live in the private rented sector”.
A spokesperson for the NRLA said: “We will study the details of the review carefully once it is published. However, we note, and welcome, Labour’s concern about the impact rent controls would have on the supply of rental properties.
“In the end, as the International Monetary Fund has made clear, increasing supply is by far the best way to ensure rents are affordable.”
Matthew Lesh, of the Institute of Economic Affairs think tank, said: “Rent controls are always and everywhere a disaster. Scotland tried a cap on rent increases for existing tenancies. The result was landlords significantly increasing rents on new tenancies, which jumped by 14% in the year to September 2023.
“It has become more difficult for new tenants to find somewhere to live, with the average search time increasing from 12 to 16 weeks. There are reports of landlords pulling their properties from the market and spending less on maintenance and improvements.
“The only solution to the housing crisis is to fix Britain’s broken planning system so that enough homes can be built where people want to live. This fiddling will only make things worse.”
Rent controls have been introduced in the UK before. In 1915, rents were restricted to the levels seen in August 1914, in order to stop wartime profiteering. Similar restrictions were introduced in 1939, and remained in place until 1968.