Greens welcome claim that rent controls could save tenants £2,400 a year

The greens could just google:-
Rent controls have rarely “worked” as intended to solve housing shortages. While they provide short-term stability for existing tenants, international case studies consistently show that strict rent caps often shrink housing supply, deter new development, and create massive informal “black” markets. Looking at international experiences highlights distinct outcomes across different models:

Sweden (Long waiting lists): Sweden utilizes a system of collective bargaining to keep rents low. While it protects current tenants, it has resulted in a severe shortage of accommodation and waiting lists of up to 10 to 20 years in major cities like Stockholm. This has forced many young people into overcrowded share-housing or illegal subletting markets.

Germany (Pressure zones & loopholes): Germany caps in-tenancy rent increases by an index and utilizes a Mietpreisbremse (rent brake) to limit rent hikes in “pressure zones” to 10% above the local average.
However, studies show this has led landlords to bypass rules by heavily furnishing apartments (exempt from the cap) or selecting higher-income tenants, resulting in ongoing affordability challenges in Berlin and Munich.Berlin,

Germany (Short-lived rent freeze): In 2020, Berlin implemented a hard cap and five-year freeze on rents for roughly 1.5 million apartments. While it initially reduced prices, it caused a steep drop in available rental listings, and the policy was ultimately overturned by the courts as unconstitutional.

I saw Polanski’s post about the profitability of landlords and commented the following:

I’d be very careful with these claims. Is tenants’ welfare the primary concern, or putting landlords out of business? If it’s the latter, you might find tenants suffer as a corollary.

The 4.5x figure compares profit margins, not profits or returns on investment. Property has low turnover relative to the capital invested, so of course its margin on revenue looks high. Comparing a landlord’s rental margin with the turnover margin of an operating business is economically meaningless. Compare return on capital or equity instead.

There may be another problem. I make no assumption that this is what the report has done, but if its HMRC data treats taxable property profit as actual profit, Section 24 creates a huge distortion because mortgage interest is no longer deducted from taxable profit. Landlords, in effect, pay tax on partial turnover, which means many pay tax on a loss – over 100%.

Take £1,000 rent, £600 mortgage interest (the loan capital is never paid off) and £200 other costs – both conservative estimates. The landlord actually makes £200 before tax. Before Section 24, a 40% taxpayer pays £80 tax and keeps £120. Under Section 24, HMRC taxes £800, producing £320 tax, then gives a £120 basic-rate credit: £200 tax, leaving nothing. Yet the taxable-profit figure is £800 — a supposed 80% “profit margin” on a business actually making £200 before tax and nothing after tax. If that figure has been used as “profit” and compared with ordinary business margins, the 4.5x claim is fundamentally flawed.

Include the actual Section 24 tax bill as a cost and the same illustrative landlord is left with a 0% margin. Against the report’s 14.2% average business margin, the headline reverses completely:

Rather than the landlord making 4.5 times the margin of an average business, the landlord makes no post-tax profit at all, while the average business has a 14.2% margin.

The FT reports 700 landlords a day are listing property for sale, that’s 250,000 a year. They’re not leaving the sector because it’s profitable, they’re leaving because they’re often paid nothing for the service they provide. This sell off puts strong downward pressure on affordable new build, with developers more likely to focus on the luxury market, which is not affected by ex-rentals. As rental stock fails to keep up with demand, the poorest tenants are pushed out of the sector into temporary accommodation or homelessness. I did a recent search over a 40-mile area and there was one 3-bedroom house for rent for under £1,000, and 448 for sale.

What is really needed is more housing, particularly affordable rental property. To get that, you need people who know what they’re doing to invest, buying up empty property – of which there is plenty – employing tradespeople to make it habitable, providing homes for those who need them, and paying tax at every stage from purchase through to rental. Without those willing to do this – landlords – you’re dealing with symptoms, not causes.

Surely 10 to 20 years wait for property is “proportionate”, just like £40,000 fines?

Rent controls could save tenants much more than £2,400 a year because sleeping on the street when all the landlords have sold is free of charge.

Reply to the comment left by graham mcauley at 14/07/2026 – 10:13
….and in Scotland when the SNP introduced rent controls the effect was to increase rents for all new lets and a surge in rents when the controls were removed.

…and in Scotland Portugal has just had to move to liberalise the rental market and speed up evictions.

https://www.globalbankingandfinance.com/portugal-launches-reform-liberalise-rental-market-speed/

Zack Polanski has no idea of what he’s talking about. The only thing that he is achieving is to discredit the Greens: The Green Party used to be the party of sustainability.

Reply to the comment left by Beaver at 14/07/2026 – 11:33
Sorry…that should just have read “…and Portugal has just had to move to liberalise the rental market..”

Scotland removed rent controls:

https://espc.com/news/post/end-of-rent-controls-in-scotland-what-this-means-for-the-market#:~:text=From%20April%202025%2C%20rent%20setting%20will%20return%20to,%28Scotland%29%20Bill%2C%20expected%20to%20take%20effect%20in%202027.

According to this link “It may also help attract property investors back to the market. In Edinburgh, demand for rental properties continues to outstrip supply, and removing financial barriers for landlords—many of whom have been handling rising costs—could improve overall rental stock.”

Even our most extreme left-wing government had to reverse its position on rent controls…just like Portugal.

Although of course the Greens are now more extreme-left-wing than the SNP.

Put a price on everything then, why single out landlords.

If Polanski wants to cap the price for tenants, why doesn’t he become a landlord and cap his own rent?

Price caps are government overreach.

Reply to the comment left by Downsize Government at 14/07/2026 – 12:15
We already have energy price caps because of lack of competition in the energy market. However, because of the effect of war-crazed despots surrounded by yes-men invading other nations, energy prices can go up and energy price caps sometimes have to be lifted. Ofgem recently announced a 13% increase in energy prices from this month:

https://www.ofgem.gov.uk/energy-regulation/domestic-and-non-domestic/energy-pricing-rules/energy-price-cap/energy-price-cap-news-and-insight

But yes, governments who are arrogant, who get seduced by their own inflated perceptions of their power, can overreach themselves and cause collateral damage. Governments have to be careful about interfering in markets and destroying competition. The Labour Renters Rights Act is constraining supply, making some tenants too risky to house, and driving rents up. I would be surprised if the rent increase caused by the introduction of the Labour Renters Rights Act is less than 13%.

Portugal has already had to back track on some of its controls.

Rent controls won’t save tenants £2,400 per year.

Government is driving rents up.

I have owned a couple of trading businesses and was a portfolio landlord for many years. Polanski is simply beyond hope if, egged on by this clown show of a think tank, he can’t see the problem with the ludicrous figures around ‘margin’ that are claimed. It just illustrates that none of them have ever owned businesses or rental property or even worked in the private sector where salaries are based on the employer turning a profit. Just an endless round of PPE degrees, third sector posts and political positions.

I have just read the history of Jack Cohen and Tesco in the period to 1970, his aim was a complete turnover of the value of a stores’ stock every two weeks – so 26 times a year. Similarly a used car dealer would turn its stock over multiple times a year. A landlord has an illiquid pile of bricks, is not operating a trading business and would be very lucky to get a gross yield in double figures at the end of a year before costs so this apparent treatment of the gross rent being some sort of 100% windfall with costs reducing it to 70 odd percent is just utter nonsense.

Incredible that Polanski’s followers seem to be university educated younger people – just the ones who will be hit hard when even more PRS policy is based on utterly financially illiterate nonsense like this.

Reply to the comment left by Andrew at 14/07/2026 – 10:20
This is exactly why I sold a couple of years ago. On my mortgaged BTL once mortgage interest relief fully kicked in it was no longer viable.
I took the hit, made a loss, but at least I didn’t have to hand any CGT to the goons in government. Also, wholly relieved to be out of the PRS