Labour’s proposals to introduce rent controls risks reducing the number of private homes available for rent, as landlords look to exit the private rented sector. 

Apropos by DJ Alexander is concerned that the introduction of rent controls linked to inflation would deter future investment in the PRS while encouraging existing landlords to sell up, which in turn would hurt tenants financially, as demand exceeds supply. 

With the shortfall of available housing set to increase due to a predicted rise in UK population over the next few years, the property management firm fears that there would inevitably be many people unable to find somewhere to live if the PRS shrinks.

David Alexander, managing director of Apropos by DJ Alexander, said: “Labour have correctly identified the need for greater social housing to counter the rising waiting lists for homes in the UK. However, they seem to believe that an improved social housing policy must be predicated on attacking the PRS when the truth is that both are required to meet the rising demands of renters in the UK.

“Rent controls are a crude means to limit rent rises since they limit increases for existing tenants but often result in new tenants paying higher rents as landlords and investors seek to recover their missing revenue in another part of the housing chain.”

Alexander continued: “The problem with rent controls is that it is a crude measure of limiting charging which does not take into account the fluctuating market. Demand rises and falls, as some cities become more expensive others appear more attractive, so the idea of fixing rent rises linked to a centralised policy actually results in a less fair market.

“Of more value for England would be for any new government to look at the way in which the PRS operates in Scotland where there are already open-ended tenancies, the abolition of no-fault evictions, and greater monitoring of the relationship between landlords and tenants. Indeed, there is already discussion of replicating the Scottish system in England with the Prime Minister already committed to ending section 21 no-fault evictions.”

Alexander is urging the government to end what he describes as a “confrontational approach to the PRS” and work with the sector to ensure that there is a sufficient supply of homes to rent to meet growing demand. 

He added: “Any sudden changes to the way in which the sector is regulated or controlled would cause major disruption with individuals suffering seriously reduced availability of rental homes in the future. 

“The majority of good landlords and forward-thinking agents understand that greater security of tenure, the ending of no-fault evictions, and transparency and fairness in all relations with tenants is the future. 

“The truth is that the PRS has stepped in and resolved a property shortage over the last two decades caused by successive governments lack of investment in social housing. Policies which aim to punish the PRS could result in large numbers exiting the market and if that happens, then Labour will have to build a lot more than one million homes in ten years.”