The election circus is in full swing and with that comes the constant barrage of new party policies. Labour’s policy to impose inflation linked rent controls stands out amongst them because of the unintended consequences it would have on the people it looks to help.
Most industry experts agree that rent controls are counter-productive by causing existing landlords to sell-up and discouraging new landlords from entering the sector. The resulting reduction in supply disproportionately affects the most vulnerable as they are squeezed out by affordability.
The UK’s previous experience with rent controls resulted in a plunge in investment in the sector which had a lasting impact on supply. Healthy markets need to be allowed to react to fluctuations in supply and demand, not be tethered to a centralised policy that is often decoupled from local markets.
At a time of record demand for housing, the PRS sector needs policies that continue to encourage investment whilst protecting tenants from rogue landlords, not poorly conceived policies that would shrink the sector. Good landlords understand that greater security of tenure, the ending of no-fault evictions, and transparency and fairness in all relations with tenants is the future and would support policies that achieve those objectives. Governments should be looking at PRS as part of the solution, not part of the problem.