Rent controls would throw private rental sector into ‘crisis’, warns David Alexander
As featured in The Negotiator.
David Alexander, our Chief Executive Officer, believes rent controls would be a disaster for the UK. Thousands of landlords have left the private rental market, reducing supply and putting upward pressure on rents.
The research – which covers initiatives being proposed for the UK – found that constantly changing regulations and more punitive tax regimes has led to institutional landlords (such as banks and investment trusts) buying up properties and then putting up rents. These larger landlords pay no tax, apart from on shareholder dividends.
The study, by the Institute of Professional Auctioneers & Valuers and the Irish Property Owners’ Association, found there was evidence that the creation of Rent Pressure Zones (RPZ) created a two-tier rental market, reducing the amount of quality accommodation and impacting on the value of all private properties in an area.
A survey of 892 landlords and agents found that 90% would not continue to invest in property – largely due to regulations, while 93% thought investors were quitting because they couldn’t charge market rent in RPZs, and 57% had decided to sell a property in the last 12 months.
David says the findings illustrate what most in the UK sector have been saying for some time: rent controls don’t work.
“They damage the private rented sector in the long term, which impacts on tenants, landlords, and investors, as well as affecting the value of individual homeowners in rent restricted areas,” he says.
While English housing minister Eddie Hughes revealed his government has no plans for rent controls, plans are already afoot in Wales and Scotland to introduce them, and Labour has said – should the party gain power – it would consider them for England.