Rent controls risk landlord exodus – Propertymark

Rent controls could push more landlords to sell and reduce the number of homes available to tenants, Propertymark has warned as the debate over imposing rent controls gathers pace.

The property body argues that limiting prices tackles the effect of the housing shortage rather than the shortage itself.

In London, the average rent for a one-bedroom home is equal to 52% of median pre-tax pay, compared with 42% across the rest of England.

Propertymark says increasing housing supply and encouraging investment would do more to improve affordability.

Rent controls warning

Propertymark said: “Rent pressures are real, but controlling the price of a scarce product does not create more of it.

“Rent controls can protect some tenants in the short term, but they do not address the shortage of homes that drives high rents.”

It added: “They can also weaken investment, reduce the number of properties available and make it harder for people seeking a new tenancy to find a suitable home.

“Evidence from schemes implemented around the world backs Propertymark’s opposition to rent controls and work to challenge and reshape the policy in Scotland.”

Evidence points to supply

Research cited by Propertymark found San Francisco’s 1994 expansion of rent controls reduced tenant mobility by 20%, while affected landlords cut the supply of homes for rent by 15% through conversion to owner-occupation and redevelopment.

In Berlin, a stricter rent freeze reduced prices for controlled homes, but weekly listings fell by more than 50%, from more than 600 before the policy was announced to fewer than 300 afterwards.

Studies of Catalonia’s 2020 controls produced differing results, with one finding rents fell by around 4% to 6% without evidence of a short-term supply reduction.

Another found an average rent fall of around 5% alongside an estimated 10% drop in supply.

Scotland landlord concerns

Propertymark says its experience in Scotland also highlights the potential impact on landlord confidence, after temporary restrictions were introduced under the Cost of Living (Tenant Protection) (Scotland) Act 2022.

A subsequent survey of Scottish letting agents found 93% reported more landlords expressing a wish to withdraw property from the private rented sector, while 83% had seen an increase in landlords serving notice to sell.

Under the Housing (Scotland) Act 2025, councils must complete their first assessments of local rent conditions by 31 May 2027, with the main controls not expected to operate before 2028.

Where a rent control area is introduced, the permitted annual increase will be CPI plus 1%, capped at 6%, while Propertymark is continuing to argue that exemptions should not favour institutional investors over individual landlords.