Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

THREE out of five landlords would leave, or consider leaving, the private rented market if rent controls were introduced.

New figures also reveal that the majority of landlords plan to freeze their rents in 2015.

The findings come as RLA Chairman, Alan Ward, will today warn that proposals for rent controls will leave tenants worse off.

According to the results of a survey of over 1,000 members of the Residential Landlords Association, over 75% of landlords either froze or cut their rents in 2014.

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In the current year, over 65% intend to do so again.

Speaking ahead of a debate on rent controls later today, Alan Ward said:

“These results blow a hole through the myth that rent controls would be good for tenants.

“At a time when tenants need more choice over where they live, state-controlled rents would choke off supply, increase rents and reduce quality. It would be history repeating itself.”

Alan Ward will point to official figures showing that in the social rented sector, rent controls have seen rents massively outstrip inflation.

Data in the most recent English Housing Survey show that between 2008/09 and 2012/13 social sector rents increased by over 25%. In comparison, private sector rents increased over the same period by 6.5%. Inflation as measured by both CPI and RPI over this period was around 16%.

Mr Ward continued:

“The reality is that rent controls would leave many tenants paying more than they do at the moment.

“Rather than coming up with ideologically-driven ideas, proponents of rent controls need to address the root issues, namely the need to boost the supply of homes to rent.”

The RLA represents almost 20,000 private sector residential landlords in England and Wales.

Alan Ward will be speaking alongside Mark Littlewood, Director General of the Institute for Economic Affairs. Speaking in favour of rent controls will be Labour MP, David Lammy and Becky Ely, who created the Rent Control petition with 38 Degrees.

A copy of the RLA’s manifesto can be found here

The results of the RLA’s survey of its members on rents can be found here

The English Housing Survey “Headline Report” for 2012/13 can be found here

Table 3 on page 19 notes that between 2008/09 and 2012/13:

Average private sector rents increased by £10 from £153 to £163 a week – an increase of 6.5%.

Over the same period average weekly rents in the social sector increased by £18 from £71 to £89. This is an increase of 25.4%.

Over this period, inflation as measured by RPI was 16.2% and CPI was 16.7%.

Between 2011/12 and 2012/13, average weekly rents in the private rented sector fell from £164 to £163, a fall of 0.6%.

In the same period, social sector rents increased from £83 a week to £89 a week, and increase of 7.2%.
In February 2010, the then Labour Government published a consultation on Investment in Private Rented

Housing available here

This outlined the dangers that rent controls pose. Page 11 said:

“A key factor behind the decline in the PRS was the introduction of rent controls during the First World War, and these became more extensive over time. Artificially low rents reduced investment in the sector, contributing to…lower maintenance standards in the stock that remained.”

Research published in 2011 by the Organisation for Economic Co-Operation and Development (OECD) has shown that rent controls lead to greatly reduced quality and quantity of new homes. This is available here

Page 18 reads:

“An illustrative correlation shows that across countries, stricter rent control tends to be associated with lower quantity and quality of rental housing, as measured by the share of tenants who lack space and who have a leaking roof.”

The CLG Select Committee in its report (available here) into the PRS in July 2013 observed on page 44 that rent controls: “would serve only to reduce investment in the sector at a time when it is most needed.”

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.
©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.

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