Propertymark has joined the growing debate over rent controls, warning that limiting private rents could create further problems for the UK’s already stretched rental market.
The organisation, which represents letting agents, accepts that rent controls may provide some short-term protection for tenants facing rising housing costs. However, it argues that they do not address the underlying shortage of homes and could discourage landlords from investing in the private rented sector.
Rent Affordability Remains A Major Issue
Propertymark says the pressure on renters cannot be ignored, particularly in areas where rents take up a large proportion of household income.
London is a clear example. The organisation points out that the average rent for a one-bedroom property is equivalent to around 52% of median pre-tax earnings, compared with approximately 42% across the rest of England.
With affordability remaining a major concern, Propertymark says tenants need access to secure, good-quality homes at prices they can realistically afford.
However, it believes the solution should focus on increasing housing supply and tackling the factors that have pushed rental costs higher, rather than simply restricting rents.
Concerns Over Rent Controls
Propertymark argues that rent controls can appear attractive because they offer a straightforward response to rising rents.
However, the organisation warns that even moderate restrictions could affect the financial returns landlords expect from their properties.
If rental income becomes increasingly restricted, some landlords may decide to sell their properties, move them into other parts of the property market or delay improvements.
Others could become more selective when choosing tenants, potentially making it more difficult for some renters to secure a home.
Propertymark also points out that exemptions for certain properties may reduce some of these effects but could create new incentives and boundaries within the rental market.
What Propertymark Wants Instead
Rather than introducing rent controls, Propertymark is calling for a wider set of measures aimed at addressing the causes of high housing costs.
Its recommendations include:
- Increasing the supply of homes across both the private and social rented sectors.
- Reviewing tax policies that discourage landlords from entering or remaining in the market.
- Ensuring Local Housing Allowance rates better reflect actual rental costs.
- Bringing more empty properties back into use.
- Providing grants and tax incentives for energy efficiency improvements.
- Introducing stable and proportionate regulation to give responsible landlords greater confidence to invest.
These proposals form part of Propertymark’s policy paper, The Future of Renting.
Could A Moderate Rent Cap Work?
The debate has recently moved beyond proposals for strict rent freezes, with some supporters advocating more limited forms of rent regulation.
One proposal for England would introduce a national “double lock”, linking rent increases to both wage growth and the Consumer Price Index (CPI).
Under the proposal, certain exemptions could apply to new homes, while rent restrictions could operate both during and between tenancies.
Supporters argue that careful design could reduce some of the negative effects associated with traditional rent freezes.
However, Propertymark believes these safeguards would not remove the fundamental concern that limiting rental increases could reduce the expected return from providing private rented homes.
Risk Of Fewer Rental Properties
Propertymark says landlords could respond to rent controls in several ways.
Some may sell their properties altogether, reducing the number of homes available to renters. Others could move properties into alternative forms of tenure or postpone maintenance and improvement work.
Landlords may also become more cautious when selecting tenants if they believe future rent increases will be restricted.
The organisation argues that these potential responses could ultimately reduce choice for renters and make it harder for people looking for a new tenancy to find suitable accommodation.
This is particularly important at a time when rental supply is already under pressure in many parts of the country.
Lessons From Overseas
Propertymark also points to international examples, including San Francisco and Berlin, as evidence that policymakers should be cautious when considering rent controls.
While different cities have introduced different systems, the organisation argues that experience from overseas demonstrates the potential for rent regulation to affect housing supply, investment and tenant mobility.
It believes policymakers should therefore consider the wider consequences rather than focusing solely on the immediate impact on rents.
Addressing The Root Of The Problem
Propertymark’s position is that the UK’s rental affordability crisis cannot be solved simply by controlling the amount landlords can charge.
Instead, it believes increasing the number of available homes should be central to any long-term solution.
More private and social housing, better support for renters, incentives for property improvements and a stable regulatory environment could help address some of the pressures affecting the sector.
For landlords, the debate also highlights concerns about how further restrictions could influence the attractiveness of property investment.
As politicians continue to consider different approaches to rental affordability, Propertymark is urging policymakers to focus on increasing supply while avoiding measures that could unintentionally encourage landlords to leave the market.
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