Rent Controls Would Be a Disaster for Tenants
A third of private sector landlords would sell properties they let if rent controls were introduced, according to new research.
The data, compiled by the research consultancy Pegasus Insight, finds that in the second quarter of the year 82 per cent of landlords in England and Wales reported strong demand for properties from tenants.
Demand was strongest in the South West, followed by the South East, the East of England and the East Midlands. The North East had the lowest levels of demand, with 68 per cent of landlords describing it as strong.
This trend has continued in the context of an already chronic shortage of homes across the private rented sector. Despite strong demand, landlords were two times more likely to have sold properties over the previous year than to have purchased rental homes. According to the data, eight per cent had bought properties to rent out, compared with 17 per cent who had sold.
Looking to the year ahead whilst 10 per cent said they planned to purchase new homes to rent out, one-third planned to sell over the same period.
Furthermore, amidst calls by some for the development of rent controls, the research found that 33 per cent of landlords said implementation would lead them to sell some, or all, of their rental properties. According to the International Monetary Fund, rent controls are associated with lower housing supply.
The research comes as an analysis by Rightmove suggests that based on current levels of demand, around 120,000 more rental properties are needed to bring rent growth back to more normal levels of two per cent a year.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“Whichever way you look at it there are more renters looking for a place to live than there are homes available.
“Ultimately rent controls would be a disaster for tenants. All they would do is choke off supply further, undermining what little choice tenants currently have when looking for somewhere to live.
“Housing is expensive because we don’t have enough of every type of property, be it for owner occupation, social rent or private rent. The only way to solve this crisis is to boost supply right across the board.”
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