Housing Secretary Angela Rayner is facing pressure from 26 MPs to reconsider the government’s position on rent controls, despite warnings from economists that such measures could reduce housing supply and push down property prices.
A letter organised by Labour MP Chris Hinchliff, signed by predominantly Labour members along with Green MPs and Jeremy Corbyn, calls on ministers to introduce rent controls to address affordability pressures in the private rented sector.
Rayner ruled out the policy last month, stating that rent controls had not necessarily reduced rents in other jurisdictions and that the Renters’ Rights Act offered tenants sufficient protection against excessive rent increases. The government has confirmed it has “no plans to introduce rent controls”.
IFS analysis highlights market risks
The Institute for Fiscal Studies (IFS) has published analysis warning that rent controls could reduce both house prices and the availability of rental properties. IFS economists Matthew Oulton and Tom Wernham said international evidence suggests such measures can reduce both the supply and quality of rental housing.
“Alongside reducing the supply of rental properties, rent controls often result in a reduction in the sale price of properties,” the economists said. They noted that while increased landlord exits could help some tenants move into homeownership through lower prices, many renters would still lack the income or deposit required to purchase.
The analysis comes as letting agent use reaches a two-year high in England and Wales, suggesting continued activity in the rental market.
Industry response
Kristine Ng, partner at Morr & Co, said the IFS had highlighted concerns many landlords and property professionals would recognise. “Whilst rent controls may provide greater certainty and short-term protection for tenants, they also risk discouraging investment in the private rented sector at a time when housing supply is already under significant pressure,” Ng said.
She added that the greater risk was not simply the impact on house prices, but the potential reduction in rental supply, noting that many renters remain unable to purchase and continue to rely on the private rented sector.
Paul Rooke, partner at Mayo Wynne Baxter, said rent controls can create a two-tier market, benefiting existing tenants while making it harder for new tenants to secure accommodation. “They may also discourage investment in maintenance and improvements, as well as limiting the supply of rental housing over time,” Rooke said.
He suggested risks could be mitigated through targeted support for vulnerable tenants, incentives for investment in new rental stock, clear exemptions for new developments and policies that increase overall housing supply.
Historical context
Rent controls operated in various forms in Britain for decades before controls on rents for new tenancies were removed in 1988. A Treasury spokesman said the chancellor remained focused on boosting business, easing the cost of living and supporting households, adding that fiscal decisions would be announced at formal fiscal events.
The debate over rental market regulation continues as UK home searches rise despite reduced buyer purchasing power, highlighting ongoing demand pressures across both rental and sales markets.
The challenge for policymakers remains balancing tenant affordability with maintaining sufficient investment to ensure adequate housing supply across the private rented sector.
