Think tank urges government to introduce rent controls
1 week ago | 8 comments
Charity urges balanced rent controls to tackle rising rents
8:01 AM, 19th May 2026, 1 day ago
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A charity is calling for rent controls to be introduced in a balanced way to mitigate unwanted consequences.
A report by the Joseph Rowntree Foundation reveals that if rent increases were capped at the Consumer Price Index (CPI) within tenancies, and CPI + 2% between tenancies, renters would save £1,200 by 2030.
However, industry experts have warned that rent controls do more harm than good.
The vast majority of landlords are profitable
The report cites polling by More in Common showing that 79% of the public believe the government should play a role in ensuring private rents are affordable.
The charity acknowledges that the government has resisted calls to introduce rent controls, while critics argue such policies could trigger a rapid sell-off of rental properties, reducing housing supply and harming tenants.
However, the charity argues landlords have continued to generate “supernormal” returns and strong profits.
The report says: “The vast majority of landlords are profitable on the rental income side of their investment: 93% of landlords in 2018 and 2021, and 95% in 2024, made a profit on their rental income.
“The fact that the proportion making an overall positive return on equity (ROE) on their investment, between rental income and capital gains, each year is even higher, reaching 98.8% in 2024, suggests it may be a feature of the sector that some landlords will accept making a loss on rental income in exchange for strong capital gains.”
It adds: “Average pre-tax return on equity (ROE) for landlords across the sector over the period analysed has remained strong. Landlords made average annual pre-tax returns of 8.5% in 2018 and 9.2% in 2021. In 2024, average returns fell slightly to 6.9%, reflecting the impact of the sharp rise in interest rates in 2022.
“In each of the three years analysed, these average rates of return exceeded the benchmark rate for the wider real estate sector, which stood at between 4.75% and 4.95% between 2018 and 2024.”
Intervention on rents
Senior policy adviser at the Joseph Rowntree Foundation, Rosie Worsdale, says rent controls would help renters, but need to be introduced in a way that is manageable for landlords.
She said: “The analysis shows the sector has generally been characterised by landlords making supernormal rates of return. Even in the most recent period, a strong majority achieved returns that exceeded both economy-wide returns from comparable investments and rates of return in the broader real estate sector.
“We argue that the high level of returns available to landlords warrants intervention on rents, both to make housing more affordable for renters and to curb the excessive returns landlords are currently able to make, at least while supply catches up.
“This needs to happen at a manageable pace, however, to avoid a sharp shock to the availability of rental homes as landlords sell up. This can be partly addressed by improving the rental tax system, which is inefficient and poorly targeted at the landlords making the largest profits.”
Rent controls rarely work
However, as previously reported by Property118, rent controls do more harm than good and actually do far more damage than benefit tenants.
According to the Institute of Economic Affairs (IEA), while rent controls may initially lower rents for existing tenants, they typically lead to higher rents in uncontrolled sectors and reduce housing supply and quality.
Even in Scotland, the rent cap has been blamed for soaring rents, which have increased by 11.6%.
Data by Hamptons reveals Scottish landlords are increasing rents at a faster pace than anywhere else in Great Britain because of rent controls reshaping the market.
Lead analyst at Hamptons, David Fell, said: “The evidence from Scotland suggests that rent controls rarely work as intended.
“At best, they delay rent increases; at worst, they set a new benchmark where landlords feel compelled to increase their rents every year by the maximum allowed.
“Faced with uncertainty over future rules, many landlords choose to raise rents little and often rather than risk falling far below market levels.”
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Renters’ Rights Act is a step forward but rent controls are needed claims Guardian
2 weeks ago | 3 comments
Member Since February 2020 - Comments: 366
10:13 AM, 19th May 2026, About 1 day ago
“79% of the public believe the government should play a role in ensuring private rents are affordable”
79 percent probably believe they should get free groceries and get quadruple pay rises. Doesn’t make it a good idea or a workable system.
Member Since February 2020 - Comments: 366
10:16 AM, 19th May 2026, About 1 day ago
If they don’t like the rent being charged, then live further out or in a smaller place, that’s what I did when renting.
When inflation and capital gains are taken into account are landlords really making super normal gains?
Member Since October 2019 - Comments: 408
11:04 AM, 19th May 2026, About 1 day ago
There’s too many people on the rostrum these days!
Member Since April 2021 - Comments: 97
11:09 AM, 19th May 2026, About 1 day ago
Little point analysing pre-tax ROE from years before Section 24 had taken full effect. Analyse today’s post-tax “profit” for an average landlord and see if they’re “supernatural”.
If rent control was a good idea there wouldn’t be a risk of landlords selling up so no need to introduce at a “manageable pace”!
Member Since May 2015 - Comments: 2221 - Articles: 2
11:43 AM, 19th May 2026, About 1 day ago
I wholeheartedly agree that government should play a role in ensuring private rents are affordable – by building more affordable housing.
There is no situation so bad that interference by the Joseph Rowntree Foundation cannot make it worse.
Member Since April 2018 - Comments: 399
11:47 AM, 19th May 2026, About 1 day ago
CPI is nonsense and does not reflect the true cost to landlords of running a property, unless perhaps they have no mortgage ,no property management company , no high ground rent to pay and carry out all the repairs themselves.
Member Since June 2022 - Comments: 12
11:57 AM, 19th May 2026, About 1 day ago
You have to be very careful when suggesting rent controls.
From previous posts many landlords are in the same situation as me, and that is we have good tenants and as a result we do not increase our rents to reflect the actual rent levels in our area. Better to have the security of good tenants who look after and respect your properties than squeeze every penny that you can.
This stance will change should rent controls be introduced. We all know that ‘costs’ will continue to increase and due to government policy and markets instability, at what level we cannot predict. Therefore to protect ourselves and prevent us being unable to recover as a result of our costs increasing by more than the ‘Rent Cap’ we would most likely need to increase rents to market or near market levels prior to its implementation and then increase annually iaw any rent control.
Result – the only ones impacted are the tenants.
I would rather leave things as they are and allow tenants to challenge what might be considered ‘unreasonable’ increases via the ombudsman system, as the RRA has now provided the protect tenants need to prevent unfair evection as a result of complaints or challenges.
Member Since April 2018 - Comments: 399
12:19 PM, 19th May 2026, About 1 day ago
Reply to the comment left by Keith Stead at 19/05/2026 – 11:57
If you have good tenants they are more than likely to discuss proposed rent increase with landlords or even just pay. If not, as has been explained, they will challenge via a tribunal and it could take 6 months or more for the landlord to receive the rent increase. The same will apply for the next rent increase meaning the landlord will have a rent shortfall every year.
There is no proposal by government to cap mortgage interest payments, property management fees etc so why a rent cap.
Member Since February 2023 - Comments: 88
1:03 PM, 19th May 2026, About 1 day ago
I think this government and Shelter etc, are failing common sense and human decency towards landlords. They will be happy when there is more homelessness than ever. They are a depraved shameless lot who have lost all respect for their people, and even more for themselves.
Member Since July 2016 - Comments: 157
3:41 PM, 19th May 2026, About 1 day ago
They are using pointlessly out of date figures, especially in regard to any prediction of likely future capital gains. Don’t know about the rest of the country, but in London my properties are declining in both real terms and actual terms. My overall rate of return at the moment is likely to be negative or certainly way below 6%. So, if you were to use all this old and i suspect very dubious data as a basis for future rent controls when interest rates are likely to increase, not decrease, and capital appreciation is likely to be at a standstill or negative, and rising inflation and regulation is likely to push landlords costs up, then you will be guaranteed to worsen the supply crisis and make renting worse. What a spectacularly useless and ill-informed piece of analysis from this so-called think tank.