Propertymark warns rent controls risk reducing landlord numbers

Propertymark warns rent controls risk reducing landlord numbers

Propertymark has cautioned that introducing rent controls in England could lead to fewer landlords, reduced rental stock and less investment, urging policymakers to focus on increasing housing supply and reforming taxation instead.

Propertymark, the trade body for letting agents, issued a statement this week highlighting concerns about rent controls as a policy response to housing affordability challenges. The organisation said that while rent controls may offer short-term relief for tenants, they fail to address the underlying shortage of homes and may ultimately discourage landlords from remaining in or entering the market.

The warning comes amid ongoing debate about proposals for a national rent control system in England, which would link rent increases to wages and inflation, with some exemptions for new properties. Propertymark emphasises that even moderate caps on rent growth can alter landlords’ expected returns, potentially prompting sales, conversions to other tenures, delayed maintenance or more selective tenant screening.

Propertymark’s recommendations to tackle affordability

In its policy paper titled The Future of Renting, Propertymark outlines alternative measures it believes would better support tenants and landlords alike. These include increasing the supply of homes in both the private and social rented sectors, reviewing tax policies that deter investment, and restoring Local Housing Allowance rates to reflect actual rents.

The paper also advocates for bringing empty homes back into use, adopting grants and tax incentives to improve energy efficiency and property standards, and ensuring regulation is stable and proportionate to give responsible landlords confidence to invest. Propertymark stresses that coordinated action on these fronts is necessary to provide secure, good-quality homes at affordable prices.

Propertymark points to international evidence from cities such as San Francisco and Berlin, where strict rent controls have been linked to reduced supply, lower quality housing and decreased tenant mobility. The trade body warns that exemptions within rent control schemes can create distortions and incentives that further complicate the rental market.

Implications for landlords and letting agents

For landlords, the prospect of rent controls raises concerns about the viability of buy-to-let investments. Reduced rental income growth may force some to sell properties or convert them to owner-occupied or short-term lets, shrinking the available rental stock. Landlords might also defer essential repairs or upgrades, impacting property standards and tenant safety.

Letting agents could see a more constrained market with fewer landlords willing to let properties under controlled rents. This could increase competition for available homes among tenants but also reduce the overall quality and choice in the private rented sector. Agents may need to advise landlords carefully on the financial and legal implications of any new rent control measures.

Despite these risks, the affordability crisis remains acute, particularly in London where average rents for one-bedroom homes consume over half of median pre-tax income. The challenge for government and industry is to balance tenant protection with incentives for landlords to maintain and expand the rental market.

What landlords should consider now

Landlords should monitor developments closely regarding rent control proposals and related housing policy reforms. Reviewing portfolio performance under different rent growth scenarios can help prepare for potential changes. Staying informed about Local Housing Allowance rates and energy efficiency grant opportunities may also support compliance and profitability.

Engaging with letting agents who understand the evolving regulatory environment will be important. Maintaining detailed records of property conditions, rent reviews and communications with tenants will help demonstrate compliance and support decision-making if rent controls or other regulations are introduced.

Supporting landlords through regulatory change with TLA

Membership of The Landlord Association (TLA) offers landlords and letting agents access to up-to-date compliance resources and guidance relevant to rent controls and housing regulation. TLA’s new property management platform, ORBIT, currently in BETA testing, is designed to help members organise rental documents, record key actions such as rent reviews and repairs, and keep evidence of compliance in one place.

ORBIT’s developing features include tools to manage tenancy documentation and monitor regulatory developments, which can be invaluable as landlords adapt to policy changes. Exploring TLA membership and ORBIT BETA access can provide practical support to navigate the complexities of rental reform and maintain confidence in managing portfolios.

Landlords should consider reviewing their current rent setting and property management practices in light of potential rent control measures and seek professional advice where needed. Staying proactive will be essential to mitigate risks and protect rental income streams.

The debate over rent controls is likely to continue as the government seeks solutions to housing affordability. Landlords and agents must stay alert to proposals and prepare for a regulatory environment that balances tenant needs with sustainable investment incentives.

Sources: Landlord Today, Propertymark